UK stocks that could rally after the budget

Like all budgets, the latest one has announcements that will bring both cheer and dismay to UK stocks. In another article today, I have already explored one stock that may suffer because of the latest policy measures, coupled with high inflation. Here, I talk of UK stocks that could rally because of the budget, if they have not started doing so already. 

A flip to consumption spending

From an overall perspective, it is clear to me that the UK budget promotes consumption spending. It seems well deserved, after more than a year spent in lockdowns. But it is also an attempt to lift the economy higher. Consider the increase in the national minimum wage. It has been increased by 6.7% to £9.5 per hour for everyone older than 23 years. This could give a lift to retailers as there is now more spendable income in the hands of consumer. Stocks that could benefit include the likes of Tesco, JD Sports Fashion, and Next among others. 

Budget encourages pub stocks

Speaking sectorally, pub stocks will benefit from the cut in alcohol duty for drinks like sparkling wine and ciders. Pubs have faced a number of challenges recently. They suffered a setback during the lockdowns of course. But besides that, they have also faced labour shortages as well as higher value added taxes. The cut in alcohol duties would be a welcome relief for them. These stocks have rallied today. Both Wetherspoons and Mitchells & Butlers are among the top-three FTSE 250 gainers today, with a 5%+ rise in share price each as I write.

Some airlines can benefit

Then there is aviation. Duties on flights within the UK have been slashed by half in a bid to encourage people to come together within the country. The easyJet share price has inched up on the announcement. While the company has a network across countries, it also runs flights within the UK. And if UK travel increases because of this duty cut, the country may just become a bigger source of revenue for it too. The airline has struggled a lot in the past year, as travel came to a standstill and there was management discord that did its share price no favours. 

Which UK stocks would I buy?

I have written at greater length about each of the UK stocks that can benefit from the autumn budget. More often than not, my verdict was bullish. But it is even more so now. I have already bought stocks like JD Sports Fashion and easyJet. It may be a good time to turn my attention to pub stocks, which I reckon are trading far below their potential right now. With growth expected to remain robust, lower alcohol duties, and an easing in Covid-19, they could bounce back sooner than we expect. This is especially so as we head towards the festive season soon. I will take an even closer look now to assess which ones to buy.