Tobacco firms can breathe a sigh of relief.
The Government has shelved plans for a tobacco levy based on market share, lifting shares in the UK’s two big producers, British American Tobacco, up 67.5p to 3,529.5p, and Imperial Tobacco, up 69p to 3,163p.
But Budget documents revealed the Government believed any levy would just have been passed on to consumers in the form of price rises.
After crunching the numbers, it said a levy of £150m would only have raised £25m “after behavioural effects”.
“As tobacco duties have already increased this year and will continue to increase by more than inflation each year … [it has been] decided not to introduce a levy,” the Government said.
The business-friendly Budget lifted the FTSE 100 by 54.34 points to 6,486.55, helping it shrug off concerns about Greece and China’s stock market collapse.
Shares in housebuilders were the biggest casualties after the Government cut tax relief on “buy-to-let” mortgages for wealthy landlords.
Persimmon fell 96p to 1,872p, Barratt Developments dropped 36p to 594.5p, while Taylor Wimpey lost 9.3p to 176.2p.
HSBC, up 0.6p at 559.2p, reversed early losses stemming from China’s stock market turmoil when the Chancellor revealed plans to scale back the bank levy and cut corporation tax to 18 per cent by 2020. The London-based but Asia-focused bank previously said a levy would influence its decision on whether to move its headquarters away from the UK.
Pearson fell 11p to 1,201p after Berenberg predicted tough times ahead for its US education business, advising clients to sell shares in the Financial Times owner.
Over on AIM, Empyrean Energy gushed 0.875p higher to 6.75p after a reserves upgrade at the Marathon Oil-operated Sugarloaf AMI project in Texas, in which it has a 3 per cent stake. Broker Cenkos lifted its target price to 20p on the news.
Mobile payments group Monitise dropped 2.42p to six-year lows of 7.5p after it revealed Visa plans to trim its 5.3 per cent stake.Reuse content