The government recently announced they are going to be allocating £140 billion in extra funding to help support the economy and this did a favour for the shares of the largest banks in the country. On the morning after the announcement, shares in RBS, jumped 7 percent.
A similar rise was seen at Barclays, where shares increased five percent after the announcement by George Osborne that low-cost financial funding is going to be given to the largest lenders in the country.
The speech by the Chancellor happened on Thursday night at the annual speech he gives at Mansion House. He stated that the Bank of England is going to be providing an additional stimulus package which it is hoped will jump start the mortgage lending situation in the country. This move has come after fears that the economy is going to be significantly worsened due to the increasing crisis in the Eurozone.
The jump in the price of bank shares encouraged the Footsie to rise almost 1 percent early on in the day. The largest retail bank in the country, Lloyds TSB, saw its shares increase by just over two percent. These rises are largely due to increased investor confidence.