Weapons companies’ share prices surged across Europe and the UK’s benchmark stock index reached a record high amid talks of increased defence spending.

The FTSE 100 index of the most valuable companies on the London Stock Exchange hit a level never seen before as arms maker BAE Systems saw its share price rise as much as 17.5% on Monday to its record high.

That share price rise added about £5.92bn to the company’s total value on Monday from the close on Friday afternoon.

Also boosting the FTSE 100 to a never-before-seen level was defence and aerospace firm Rolls-Royce Holdings whose stocks rose 6% at one point on Monday.

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Elsewhere on the London Stock Exchange, the bigger FTSE 250 index comprising more British companies was also raised by the anticipated growth in weapons spending.

Its biggest risers were defence technology company QinetiQ and defence support business Babcock International, which climbed 10.3% and 9.3% respectively.

It was not just British arms businesses given a lift, across Europe stocks in such companies were on the up.

A Europe-wide phenomenon

Shares of Germany’s largest defence company Rheinmetall jumped 18% while Italy’s Leonardo was up 15%.

Expectations of more defence spending rose after European leaders got together in London to discuss greater funding for Ukraine in its fight against Russia and a possible EU-backed peace deal.

Why?

Prime Minister Sir Keir Starmer announced on Sunday a loan to Ukraine and a £1.6bn deal for a Belfast factory to supply missiles for the country’s fight against Russia.

Mr Starmer had suggested a coalition of European and other allies could defend a potential deal for Ukraine to “guarantee the peace” and increase military spending to do so.

He made the comments at a summit of EU leaders, along with Canada and Turkey, which had been planned for more than a week but took on urgency following the disastrous meeting and diplomatic breakdown between President Donald Trump and Volodymyr Zelenskyy at the White House on Friday.

The UK had already announced it would increase military spending to 2.5% of GDP – a measure of everything produced in the economy – by 2027.

Chancellor Rachel Reeves had also announced an extra £2.26bn for the Ukrainian war effort, funded by the profits made from hundreds of billions of dollars worth of Russian sovereign assets frozen since the start of the full-scale war in February 2022.

The private equity backer of the technology company previously known as UKFast is exploring a sale that it hopes will fetch a £400m price tag.

Sky News has learnt that Inflexion, the buyout firm, has hired investment bankers to orchestrate a sale of ANS, which provides cloud hosting services to corporate customers.

UKFast was rebranded as ANS in the wake of revelations in the Financial Times in 2019 about the conduct of UKFast’s founder, Lawrence Jones.

Mr Jones was convicted of rape and sexual assault in 2023, and was sentenced to 15 years in prison.

In December, he was stripped of his MBE, which had been awarded for services to the digital economy in 2015.

Arma Partners is understood to have been hired to advise on the sale of ANS, which was acquired by Inflexion in 2021.

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ANS was founded by Scott Fletcher, a former child actor who appeared in television shows such as Casualty and Jossy’s Giants.

The combined group, which is based in Manchester, is expected to be worth between £300m and £400m, according to banking sources.

Prospective bidders are expected to include other private equity firms.

Inflexion declined to comment.

A former chief executive of Aston Villa and Liverpool is a surprise contender to become the inaugural chairman of the government’s controversial football watchdog.

Sky News can exclusively reveal that Christian Purslow, who left Villa Park in 2023, is on a three-person shortlist being considered by Whitehall officials to chair the Independent Football Regulator (IFR).

Mr Purslow, an outspoken character who has spent much of his career in sports finance, was this weekend said to be a serious candidate for the job despite having publicly warned about the regulator’s proposed remit and its potential impact on the Premier League.

A former commercial chief at Chelsea Football Club, Mr Purslow spent an eventful 16 months in charge at Anfield, spearheading the sale of Liverpool to its current owners following a bitter fight with former principals Tom Hicks and George Gillett.

He joined Aston Villa in 2018 when the club was in its third consecutive season in the Championship, seeing them promoted via the play-offs at the end of that campaign.

It was unclear this weekend how much of the football pyramid would respond to the appointment of a chairman at the regulator who has been so closely associated with top-flight clubs, given ongoing disagreement between the Premier League and English Football League (EFL) about the future distribution of finances.

One ally of Mr Purslow said, though, that his independence was not in doubt and that his experience of working outside the Premier League would also be valuable if he landed the IFR chairman role.

Another senior football figure said Mr Purslow “would be welcomed by the football community as someone who has worked in football, and not as a civil servant or politician”.

In the past, Mr Purslow has both welcomed the prospect of further regulatory oversight of the sport, while also warning in a BBC interview in 2021, during his stint at Villa Park: “The Premier League has really always been the source of funding for the rest of football and the danger here is killing the golden goose, if we over-regulate a highly successful and commercial operation.

“I think we have to be very careful as we contemplate reform that it does not ultimately damage the game.

“We already have a hugely successful English football Premier League – the most successful in the world.”

Two years later, however, he told Sky News’ political editor, Beth Rigby: “I like the idea that the government wants to be involved in our national sport.

“These [clubs] are hugely important institutions in their communities, economically and socially – so it’s right that they [the government] are interested.”

The disclosure of Mr Purslow’s candidacy means that two of the three shortlisted contenders for what will rank among the most powerful jobs in English football have now been identified by Sky News.

On Friday, it emerged that Sanjay Bhandari, the chairman of Kick It Out, the football anti-racism charity, was also in the frame for the Manchester-based position, which will pay £130,000-a-year.

A decision is expected in the coming weeks, with the third candidate expected to be a woman given the shift in Whitehall to gender-diverse shortlists for public appointments.

The establishment of the regulator, which was originally conceived by the previous Conservative government in the wake of the furore over the failed European Super League project, has triggered deep unrest in the sport.

This week, Steve Parish, the influential chairman of Premier League side Crystal Palace, told a sports industry conference organised by the Financial Times that the watchdog “wants to interfere in all of the things we don’t need them to interfere in and help with none of the things we actually need help with”.

“We have a problem that we’re constantly being told that we’re not a business and [that] we’re part of the fabric of communities,” he is reported to have said.

“At the same time, we’re…being treated to the nth degree like a business.”

Interviews for the chair of the football regulator took place in November, with a previous recruitment process curtailed by the calling of last year’s general election.

Lisa Nandy, the culture secretary, will sign off on the appointment of a preferred candidate, with the chosen individual expected to face a pre-appointment hearing in front of the Commons culture, media and sport select committee.

The Football Governance Bill is proceeding through parliament, with its next stage expected in March.

It forms part of a process that represents the most fundamental shake-up in the oversight of English football in the game’s history.

The establishment of the body comes with the top tier of the professional game wracked by civil war, with Abu Dhabi-owned Manchester City at the centre of a number of legal cases over its financial dealings.

The government has dropped a previous stipulation that the regulator should have regard to British foreign and trade policy when determining the appropriateness of a new club owner.

The IFR will monitor clubs’ adherence to rules requiring them to listen to fans’ views on issues including ticket pricing, while it may also have oversight of the parachute payments made to clubs in the years after their relegation from the Premier League.

The top flight has issued a statement expressing reservations about the regulator’s remit, while the IFR has been broadly welcomed by the English Football League.

A Department for Culture, Media and Sport spokesman said: “We do not comment on speculation.

“No appointment has been made and the recruitment process for [IFR] chair is ongoing.”

Mr Purslow was abroad this weekend and did not respond to a request for comment.