Defence stocks rally as John Healey appointed chancellor; UK borrows less than expected in June – business live

UK defence stocks rallied following the appointment of John Healey as Chancellor of the Duchy of Lancaster, a role with oversight of national security and resilience. The FTSE 100 defence index rose 1.5% on the news. Separately, UK government borrowing in June came in below expectations at £12.8 billion, down from £14.5 billion in the same month last year, providing some fiscal headroom. Grocery inflation eased to 2.6% in the four weeks to 12 July, its lowest since December 2024, though the average annual household grocery bill rose by £156 to £5,530. Thames Water also announced a potential restructuring with enhanced public controls.

Global Impact

Politically, Healey's appointment signals a more assertive UK stance on defence and resilience, which could influence NATO spending commitments and boost European defence sector sentiment. Economically, lower UK borrowing provides marginal fiscal flexibility for the new government, but the cumulative grocery cost rise underscores persistent cost-of-living pressures that may weigh on consumer spending and GDP growth.