The sector rallied as investors backed the main beneficiaries of Britain’s £15bn Defence Investment Plan

Rolls-Royce and BAE Systems were among the London-listed defence stocks to surge on Tuesday as investors piled into the primary beneficiaries of Keir Starmer’s £15bn military spending proposals.

The outgoing prime minister unveiled the government’s long-awaited Defence Investment Plan during a speech in Berkshire, appearing alongside Chancellor Rachel Reeves and Defence Secretary Dan Jarvis.

The sweeping market rally across the sector stood in stark contrast to the political furore surrounding the proposals. Military chiefs had pushed for double the amount contained in the final headline figure.

Jarvis’s predecessor, John Healy, resigned after Downing Street declined to increase spending as the document was being finalised earlier in June.

But the plans proved sufficient to trigger a broad advance across the defence sector, from multi-billion pound heavyweights on the FTSE 100 to relative minnows on the Alternative Investment Market, as reported by City AM.

Rolls-Royce climbed almost three per cent to 1,457p, nudging the jet engine maker’s shares back towards the record high of just under 1,533p reached last week, driven by strong investor appetite ahead of the defence spending update.

The manufacturer, which has UK sites in Derby and Filton near Bristol, is a key supplier to the Ministry of Defence (MoD), producing engines for the Royal Air Force’s C-130 Hercules and the Eurofighter Typhoon. The company also designs and builds the nuclear reactors that power the Vanguard and Astute submarines, which carry the UK’s nuclear deterrent and remain permanently on patrol at sea.

Also on the top-tier index, BAE Systems climbed nearly two per cent to 1,842p.

The £52bn firm is the single largest supplier to the MoD. It is spearheading the RAF’s next-generation fighter plane under the Combat Air Programme, or GCAP, being run in partnership with Japan and Italy.

It also constructs UK submarines at Devonshire Dock Hall in Barrow-in-Furness.

Babcock International, which owns Devonport Dockyard in Plymouth, surged over three per cent to 950p. The company maintains the army’s 30,000-strong vehicle fleet, ranging from quad bikes to Challenger tanks, ensuring they remain battle-ready at a moment’s notice.

On the FTSE 250, Qinetiq, which trains RAF pilots and tests crucial weapons systems, gained two per cent to reach 421p.

Cohort, an AIM-listed provider of sonar and other military sensors, jumped nearly five per cent to 1,250p.

Also on AIM, Velocity Composites advanced almost eight per cent to 14p. The £7.8m Burnley-based company supplies bespoke carbon fibre materials to military grades.

Overall, the FTSE 350 Aerospace & Defence sub-index, which tracks the sector, was up 2.5 per cent on Tuesday. It comfortably outpaced the FTSE 100’s 0.8 per cent gain and a 0.7 per cent rise for the FTSE 250.

Four board members have years of experience at company that celebrates 50th anniversary this year

Britannia Hotels Group has appointed a new board of directors – and they have vowed a “new phase of development” and investment at the chain that has been voted Britain’s worst for years in a row.

In November, Britannia was ranked bottom in the annual Which? Survey of UK hotel groups for the 12th year in a row. The Altrincham company has also hit the headlines for winning contracts to use some of its rooms and hotels to house asylum seekers.

Now the group has appointed four directors, all of whom held senior roles in the group, to its board. In a statement, it called the appointments “a new chapter in the company’s evolution” and said the directors would be focusing on “enhancing guest experience, investing in the UK-wide portfolio and strengthening team performance”.

Britannia added: “The new board will honour the group’s 50-year legacy while evolving the business to meet changing guest and employee expectations, spearheading a number of improvements across the portfolio. These include a multi-million pound property refurbishment programme, investment in new systems and technology for hotel teams, the introduction of a new entertainment breaks programme at five hotels across the country and a visual refresh of the Britannia Hotels brand identity.”

The new board members are:

• Simon Powell, who has 30+ years’ operational and managerial experience, including 18 with Britannia
• Helen Rees, who has 25+ years’ of managerial hospitality experience and joined Britannia in 2023
• Prakash Sivarajan, who had 25+ years’ experience in hospitality for a number of leading brands, and joined Britannia in 2020
• Paul Streets, who has 10+ years of experience as a solicitor in a variety of legal roles, including three as general counsel for Britannia Hotels

Mr Streets said: “Britannia Hotels has a proud heritage and unique place in the UK hospitality landscape. As we approach our 50th anniversary, the new Board represents an important moment for the business – one that allows us to respect what has been built over many years, while bringing greater focus, clarity and ambition to how we operate going forward.

“Our priority is to invest in our hotels and our people and deliver consistent and great value experiences for our guests. We are excited about the opportunity ahead and confident in the long-term future of Britannia Hotels Group.”

Britannia was founded in 1976 by Alex Langsam and today owns 65 properties with more than 10,000 bedrooms. Its best-known hotels include the Adelphi Hotel in Liverpool, the Britannia Hotel in Manchester, the Royal Bath Hotel in Bournemouth, and the Grand Hotels in Scarborough, Blackpool and Llandudno.

It also owns the Pontin’s chain of holiday camps. The Southport site has been closed since 2024.

Mr Langsam has been called the “asylum king” after his company became well-known for housing asylum seekers in some of its hotels, including Britannia’s International Hotel in Canary Wharf, through contracts with the Home Office. In April the Government announced it was closing 11 more asylum hotels, including the Britannia Hotel in Wolverhampton which had seen protests last year.

California restaurant chains are facing a permanent overhaul to their menus beginning July 1, as a first-in-the-nation law requiring major food allergen disclosures takes effect.

Under California’s Senate Bill 68, food facilities subject to the federal menu-labeling law — generally chain restaurants with 20 or more locations operating under the same name — must provide written notification of major food allergens that they know, or reasonably should know, are contained in each menu item, according to guidance from the California Department of Public Health.

The requirement applies to the nation’s nine major food allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans and sesame.

Restaurants may comply by listing allergens directly on printed menus or by providing the information digitally, including through a QR code linked to an online menu. Businesses that choose the digital option must also offer a written alternative for customers who cannot access the information electronically, such as an allergen-specific menu, chart, grid or booklet.

BELOVED GAS STATION PIZZA CHAIN CEO REVEALS 400-STORE EXPANSION PLAN AS FOOD BUSINESS BOOMS

North Italia Diners eat inside North Italia restaurant in Walnut Creek, California, March 20, 2026. (Smith Collection/Gado/Getty Images / Getty Images)

The law applies to restaurant chains already covered by the federal menu-labeling requirements, while compact mobile food facilities, non-permanent food facilities and certain limited-time menu specials are exempt.

The California Restaurant Association said the new requirements extend beyond traditional printed menus, requiring covered restaurants to provide allergen disclosures across customer-facing ordering platforms, including menu boards, drive-thru boards, kiosks, websites, mobile apps and online ordering platforms.

Outback Steakhouse location (Getty Images / Getty Images)

The trade group said California is the first state in the nation to enact restaurant allergen disclosure requirements of this kind.

State Sen. Caroline Menjivar, a Democrat who authored the legislation, said the bill was inspired in part by her own experiences living with severe food allergies and aims to make dining out safer for millions of Californians.

“California will once again lead the nation by becoming the first state to mandate allergens be listed on menus for food facilities with 20 locations and above,” Menjivar said in a statement after the Legislature approved the measure last year.

Chili’s restaurant exterior building located in Victorville, California, adjacent to Interstate 15 on Feb. 11, 2020. (Getty Images / Getty Images)

Menjivar also argued the law could benefit restaurants by giving families managing food allergies greater confidence when dining out.

“These businesses will be able to offer allergen families a unique additional assurance that will drive customers to their establishments,” she said.

According to Menjivar’s office, nearly 4 million Californians have potentially life-threatening food allergies, while the Centers for Disease Control and Prevention estimates food allergies affect nearly 8% of U.S. children.

The Asthma and Allergy Foundation of America co-sponsored the legislation. AAFA CEO Kenneth Mendez called the measure “a win-win for California families and restaurants.”

“ADDE promotes improved public health by creating a climate that will help reduce the incidence of food allergy reactions and promote food allergen disclosure,” Mendez said in a statement.

CLICK HERE TO GET FOX BUSINESS ON THE GO

California officials said the law makes the state the first in the nation to require large restaurant chains to disclose allergens on menus. Supporters noted that the European Union has required restaurant allergen labeling since 2014, while no comparable nationwide requirement currently exists in the United States.

SCB EIC has revised its 2026 forecast for Thailand’s economic growth to 2%, following the easing of the situation in the Middle East, which has led to lower energy prices, alleviating travel costs and supporting the recovery of the tourism sector. Exports and investment in certain industry groups also continue to expand well.

However, the Thai economy is likely to slow down in the coming period due to the impact of higher energy and raw material costs from the previous conflict, which is now affecting production costs, inflation, and purchasing power. Even with additional government support, particularly the 400 billion baht loan decree, the recovery remains a K-shaped pattern, concentrated in certain sectors, especially the electronics industry which is highly reliant on imports. Meanwhile, low- and middle-income households and SMEs remain vulnerable due to slowing income and high debt levels. For 2027, the Thai economy is expected to grow at a similar rate of 1.9%, reflecting limitations in new economic drivers amidst tight financial pressures and high external risks.

The Thai economy received a short-term boost from the easing of the conflict in the Middle East, but the cost impact continues to put pressure on the economy.

The decline in oil prices, though still higher than pre-war levels, has helped mitigate the impact on businesses, particularly the tourism sector, which is expected to recover better due to lower travel costs. Meanwhile, exports, especially in the electronics industry, continue to grow, and foreign investment is expanding well. However, the effects of previously high energy and production costs are still gradually being passed on to the real economy and will put more pressure on economic activity from the second quarter onwards.

SCB EIC estimates that these impacts will be transmitted to the Thai economy through three main channels: 

(1) energy and production costs will put pressure on inflation, the cost of living, household purchasing power, and affect business profit margins, especially those that are energy-intensive and logistics-intensive ;

(2) a slowdown in the global economy will affect exports due to weaker global purchasing power, especially in markets directly affected by the war. Meanwhile, the high import energy prices in the preceding period and the accelerating trend in capital goods imports will put pressure on the trade balance and current account balance, which are likely to worsen significantly this year; and 

(3) tighter financial conditions due to volatility in financial markets and capital flows, resulting in a higher risk premium and yield curve.

A clear K-shaped recovery is emerging, concentrated in large businesses and the technology sector, while households and SMEs remain vulnerable.

SCB EIC projects that the Thai economy is showing a clearer K-shaped recovery trend, driven primarily by large businesses and technology-related industries such as AI, data centers, electronics, and digital infrastructure. These sectors are supported by investment and exports of certain goods. However, because most of these businesses have a high proportion of imports, their positive impact on domestic supply chains, employment, and broader income is limited.

Conversely, low- and middle-income households and SMEs remain vulnerable to slow income recovery, rising production costs and living expenses, and high debt burdens. This limits consumption recovery and puts pressure on businesses that rely on domestic purchasing power, particularly small businesses and certain service sectors, impacting sales, liquidity, and debt repayment ability. The disparity in recovery between business and household sectors will be a significant constraint on the Thai economy in the coming period.

The Thai economy is projected to grow at a low rate in 2026-2027, despite government support through the 400 billion baht emergency decree.

SCB EIC forecasts Thailand’s economy to grow by 2% in 2026, higher than its previous forecast but still lower than the previous average. This forecast is driven by better-than-expected first-quarter economic figures, the easing of the situation in the Middle East, and government support, particularly the 400 billion baht loan decree, which will help support the economy through measures to reduce the cost of living, stimulate spending, and some investment related to the energy transition. However, the support from the “Thai Helps Thai Plus” measures will mainly boost economic activity in the short term, before this momentum slows towards the end of the year. The clarity of the energy transition measures still needs to be monitored to assess their impact on the economy.

For 2027, SCB EIC forecasts that the Thai economy will expand at a rate similar to 2026, around 1.9% , reflecting constraints from new drivers for medium-term growth. Existing drivers remain limited by factors such as slow consumer recovery due to the deleveraging process of household debt, concentrated investment and exports with high dependence on imports, reduced government policy space, and the vulnerability of SMEs facing intense competition and tight financial conditions.

Monetary policy faces limitations; the Monetary Policy Committee is expected to maintain the policy interest rate at 1% throughout this year.

SCB EIC estimates that the Monetary Policy Committee (MPC) is likely to maintain its policy interest rate at 1% throughout 2026. Inflationary pressures are primarily driven by supply-side factors, and long-term inflation expectations among the public and businesses remain unaffected. SCB EIC revised its average inflation forecast for this year down from its previous view to 2.6%, remaining within the target range. This is due to the easing of the war situation leading to lower energy prices. Simultaneously, Thailand maintains strong external stability and high levels of international reserves, thus eliminating the need to urgently raise interest rates to control inflation and currency depreciation, as has been observed in some regional countries.

Although policy interest rates remain low, overall financial conditions remain tight, particularly for retail borrowers and SMEs, due to slowing income growth and cautious lending practices by financial institutions driven by declining loan quality and repayment ability risks. Therefore, measures to assist borrowers and increase SME access to credit, coupled with measures to enhance income-generating capabilities, will play a crucial role in improving liquidity and sustaining the economy in the coming period.

Businesses face pressure, but opportunities remain in sectors related to AI, FDI, and megatrends.

Thai businesses face significant pressure from costs that remain higher than pre-war levels, supply chain volatility, and uneven demand recovery. These factors are impacting sales, profit margins, and liquidity for many businesses, particularly those limited in passing on costs to consumers in a fragile demand environment.

SCB EIC believes that future business trends will show clearer divergence, particularly among large corporations and SMEs, as well as businesses that can adapt by reducing costs, increasing productivity, and connecting with supply chains that thrive in line with major global trends. These businesses will be able to maintain their growth, but close monitoring of cost risks and demand volatility is necessary.

Growth opportunities remain in AI-related businesses, foreign investment, and megatrends such as electronics, data centers, clean energy, food, and healthcare. These sectors are supported by new investments, technological advancements, manufacturing relocation, and long-term shifts in consumer behavior. Therefore, Thai businesses should accelerate efficiency improvements, cost restructuring, and integration into new supply chains to enhance competitiveness amidst high global economic uncertainty.

The global economy is slowing down this year amid rising global inflation and interest rates.

SCB EIC forecasts that the global economy will expand by 2.5% and 2.6% in 2026 and 2027, respectively, driven primarily by investment.
In the field of AI, electronics manufacturing countries continue to benefit. The situation in the Middle East has improved, but high uncertainty remains. Looking ahead, the US tariffs under Section 301 remain a major risk to global trade in the second half of the year. Regarding monetary policy, major central banks around the world continue to prioritize the risk of inflation exceeding their targets. SCB EIC believes the Fed will not ease monetary policy this year, maintaining interest rates at 3.5-3.75% throughout the year. Global financial conditions are expected to remain tight due to high government bond yields.

Other People are Reading

The North East and Yorkshire group has shed some jobs and two locations amid a downturn in the sector but says there should be improvements ahead

Builders’ merchant James Burrell says it continues to battle through tough conditions in the construction market but is determined to bounce back.

The North East-based group, which also has a number of branches in Yorkshire, has closed two sites between 2024 and 2025, and shed more than 35 jobs in the same time. Bosses at the materials retailer say an anticipated recovery in the construction sector since its steep 2023 decline has not materialised and has required “tough decisions” of the family-owned firm.

Newly published accounts covering the year to the end of October show James Burrell built turnover from £95.1m to £96.3m as it returned to operating profit of more than £566,000, having posted an operating loss of more than £1.1m the year before. Pre-tax losses over the same period narrowed from £2.06m to £486,789.

Writing in the accounts, managing director Mark Richardson said: “The anticipated recovery across the construction sector following a sharp decline in 2023, has yet to materialise. The cost-of-living effects are still prevalent across society and UK businesses are still having to deal with elevated inflationary and interest rate effects.

“For a multi-generational family owned and managed business, who recognises its people as its biggest asset, this has meant tough decisions have been necessary to balance the conflicting priorities of maintaining an acceptable financial performance, whilst supporting the employee base who serve the business so faithfully.”

He added: “Although we are not where we want to be, there is a feeling that we are moving back in the right direction again. We are faced with a higher cost threshold than we have previously been used to after recent material price inflation, tax rises and increases in the living wage. But we have made the necessary adjustment to right-size the business accordingly, stripping out nonessential costs and process inefficiencies, aided by the implementation of our new IT system.

“Despite our marketplace remaining subdued and uncertainty continuing to cloud the present position, we believe there will be improvement ahead. Our strong financial base and continued reinvestment in the business should ensure that James Burrell will continue to prosper and to take advantage of new opportunities as and when they arise.”

The firm said the challenging trading conditions of the last three years showed no signs of abating in 2026, and that despite inflation having eased, interest rates remain high and economic growth was stagnant. Bosses expressed disappointment in the trading performance despite the small improvements reported, but said the firm remained resilient and “determined to bounce back” when demand recovers.

One of key factors contributing to those tough trading conditions has been sluggish housebuilding activity. Mr Richardson said regular government pledges to encourage the building of new homes had failed to come good, pointing to problems associated with higher interest levels, delays in the planning system, a lack of help-to-buy type incentives and red tape facing developers

It is hoped the closures will improve the retailer’s financial position

Kitchens chain Magnet is to shut 15 stores as part of a major restructure. The company said it would close the “underperforming” locations as part of a company voluntary arrangement (CVA) aimed at helping secure the group’s finances.

The proposed CVA is intended to “address property costs that are no longer sustainable”, the company said.

Magnet did not disclose how many workers would be hit by the closures, but said affected staff “will be supported throughout and suitable alternative roles within the business will be offered wherever possible”.

The majority of the brand’s 159 stores will not be impacted by the restructuring and will continue to operate as normal.

The proposals, which will be overseen by Natasha Harbinson, Will Wright and Chris Pole from advisory firm Interpath, are subject to creditor approval.

Sophie Rose, chief executive of Magnet Group, said: “This is a difficult decision and not one we have taken lightly, particularly where colleagues may be impacted.

“But taking this action now is the right thing to do for the long-term health of Magnet Group.

“It allows us to deal with property costs that are no longer sustainable and protect the stronger parts of our estate.

“I am confident these proposals will help Magnet Group build a stronger, more resilient business that is better placed to serve customers, support partners and return to sustainable profitability.”

Magnet said it would transfer any customer orders to the closest alternative store if their local site closes.

List of Magnet stores to shut

– Andover, Hampshire

– Birmingham Minworth, West Midlands

– Blackburn, Lancashire

– Bridgwater, Somerset

– Brighton, East Sussex

– Colwyn Bay, Wales

– Dorking, Surrey

– Farnborough, Hampshire

– Ramsgate, Kent

– Romford Trade, Greater London

– Stirling, Scotland

– Stockton, County Durham

– Watford, Hertfordshire

– Weymouth, Dorset

– York Trade, North Yorkshire

This article was written by

Follow

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

NEW YORK — Shares of Air Products and Chemicals Inc. surged more than 9 percent Tuesday as the industrial gases company announced it would not proceed with its Louisiana Clean Energy Project, freeing capital for other strategic priorities and signaling a shift in project focus.

The move sent the stock to around $296.58 in morning trading, reflecting investor approval of a more disciplined approach to capital allocation amid evolving energy market conditions. Air Products, a major supplier of hydrogen, oxygen and other industrial gases, has been navigating complex decisions around large-scale clean energy initiatives.

The Louisiana project, which involved blue hydrogen production and carbon capture, faced challenges including cost pressures and market dynamics. By stepping back, the company aims to redirect resources toward higher-return opportunities in its core industrial gases business and select growth projects.

Air Products maintains a strong global footprint with operations spanning atmospheric gases, process gases and specialty chemicals. Its business model benefits from long-term contracts with refineries, chemical plants and electronics manufacturers, providing stable cash flows.

The decision on Louisiana aligns with broader industry trends where some clean hydrogen projects have encountered delays due to permitting, infrastructure needs and economic viability. Air Products emphasized its commitment to the energy transition while prioritizing financial discipline.

Chief Executive Officer Eduardo Menezes has highlighted the importance of balancing innovation with returns. In recent quarters, the company reported solid operating performance driven by pricing actions, productivity improvements and volume growth in key segments.

Tuesday’s announcement provided clarity on capital spending plans. Air Products has a robust project pipeline, including expansions in Asia and investments in hydrogen infrastructure where demand fundamentals remain supportive.

Industrial gases demand has proven resilient across economic cycles. Air Products’ on-site supply model, where plants are built adjacent to customer facilities, creates high barriers to entry and predictable revenue streams.

The company’s merchant business, serving smaller customers through bulk and cylinder distribution, offers additional flexibility. Specialty gases for electronics and healthcare applications provide higher-margin growth avenues.

Analysts view Air Products as well-positioned in the hydrogen economy despite project adjustments. Its expertise in production, liquefaction and distribution positions it for opportunities in mobility, power generation and industrial decarbonization.

Tuesday’s share price reaction underscored the market’s preference for capital discipline over speculative large projects. Air Products shares had traded in a range reflecting mixed sentiment around clean energy investments before the announcement.

The company’s financial strength supports its strategic flexibility. Strong cash generation from operations and a solid balance sheet enable selective investments while maintaining dividends and share repurchases.

Air Products has a long history of innovation in gas separation and liquefaction technologies. Its membrane solutions and adsorption systems serve diverse applications from biogas upgrading to medical oxygen.

Sustainability remains integral to operations. The company publishes annual reports detailing progress on emissions reductions and community initiatives. Recent expansions, such as membrane manufacturing facilities, underscore commitment to technology leadership.

Global operations expose Air Products to currency and geopolitical risks, yet diversification across regions mitigates these factors. Asia continues as a growth engine with new plants supporting semiconductor and clean energy customers.

Tuesday’s trading volume was elevated as investors digested the news. The positive move contrasted with broader market caution in some industrial sectors.

Longer-term, analysts project steady earnings growth for Air Products driven by contracted volumes and pricing discipline. The company’s guidance has typically emphasized resilience even in uncertain macroeconomic environments.

Competitive landscape includes Linde and other industrial gas providers. Air Products differentiates through technology and customer relationships built over decades.

The Louisiana decision may open capacity for other initiatives. Management has signaled focus on optimizing existing assets and pursuing accretive opportunities in core competencies.

Investors will monitor upcoming quarterly results for updates on project pipelines and financial metrics. Air Products typically reports solid execution on safety, reliability and customer service.

The industrial gases sector plays a critical role in manufacturing, healthcare and energy. Air Products’ products touch everyday applications from food packaging to steel production.

Tuesday’s surge highlighted how strategic announcements can drive significant market reactions. The stock’s movement reflected relief that capital would be deployed more efficiently going forward.

Air Products continues to attract institutional interest for its defensive characteristics and growth potential. Dividend growth history adds appeal for income-oriented investors.

As the company refines its portfolio, focus remains on delivering value through operational excellence and targeted investments. The Louisiana pivot exemplifies this disciplined approach.

Market participants will continue assessing the implications for future project announcements and capital returns. Air Products’ track record suggests measured progress toward long-term targets.

The announcement reinforces the company’s adaptability in a dynamic energy landscape. By prioritizing returns, Air Products aims to strengthen its competitive position while supporting essential industrial processes.