March 6 (Reuters) – UK shares closed higher on Wednesday, with the domestically-focussed FTSE midcap index at a two-month peak, as the government bet on tax cuts to revive its election chances, while Premier Foods surged to a nearly 13-year high.
The blue-chip FTSE 100 (.FTSE), opens new tab ended up 0.4%, while the mid-cap FTSE 250 (.FTMC), opens new tab rose 1.1% to its highest level since early January.
Finance Minister Jeremy Hunt’s pre-election budget revealed tax cuts, an annual economic growth forecast of 0.8%, and he added that the Bank of England’s 2% inflation target would be achieved in a few months.
“The relationship between tax cuts and growth is a lot hazier than the caricature,” said Will Hobbs, head of UK multi-asset wealth at Barclays Private Bank and Wealth Management, injecting a note of caution.
Despite a one year extension on windfall levies on energy firms’ profits, the sector (.FTNMX601010), opens new tab added…
