UK Announces Fresh Military Aid Package for Ukraine

Yesterday the government announced fresh military aid funding for Ukraine in what will be the largest lethal aid package of its kind sent by the UK. No.10 announced that £500m worth of weaponry and materiel would be sent to Ukraine to help support their defence against Russia.

The package will include precision-guided cruise missiles including storm shadows which are able to be fired at a range of 250km. 400 Armoured vehicles, 60 boats and drones will also be sent in addition to supplies of ammunition.

The latest package brings the UK’s military spending on Ukraine to £3bn this fiscal year.

Sunak’s announcement comes ahead of his trip to Warsaw and Berlin this week where the conflict in Ukraine will be high on the agenda. The Prime Minister will also meet with NATOs Secretary-General Jens Stoltenberg where it is expected they will discuss new measures with Donald Tusk to deploy RAF jets to help patrol Polish airspace.

As the prevailing risk-off sentiment which characterised much of last week’s trading eased yesterday, equity markets rose across the board.

Yesterday the FTSE 100 closed at record highs having risen over 1.7% throughout the course of the session. The relief rally saw the blue-chip index close at 8,031.91 pts, exceeding its previous February 2023 high close by over 15pts.

While the intra-day high of 8,047.06 pts set in February was not reached, the UK’s index outperformed its counterparts in Germany and France yesterday where the DAX and CAC closed 0.6% and 0.2% higher, respectively. The rise in the FTSE 100 yesterday came as the FTSE 250 rose 1.07%.

Across the pond the S&P 500 closed 0.9% higher marking its first day in the green for over a week. Meanwhile the Nasdaq closed 1.11% higher while the Dow Jones rose a more modest 0.67%. Investors now look towards a string of corporate earnings out from the US in addition to PMI figures released today. Markets also to keep a close eye on developments in the Middle East given heightened tensions between Iran and Israel impacting wider geopolitical stability in the region.

Elsewhere, gold came under pressure closing the session below $2,300 dollars per ounce – its lowest level since 5 April.

On 4 May refuelling staff of Unite Union employed by AFS at Heathrow Airport will strike in a dispute over pay and working conditions. Their strike which is expected to last 72 hours will coincide with the May bank holiday disrupting flights for thousands of travellers. AFS refuels planes for Virgin Atlantic, Emirates and Singapore Airlines, though not for British Airways which handles around half of Heathrow’s traffic.

In a further disruption to British airports the Public and Commercial Services (PCS) union has called for members of the UK’s Border Force to strike between 29 April to 2 May. The union has complained against “an unworkable new roster system”.