BAE Systems’ 2018 forecast buoyed by Budget plans for military spending

Aerospace giant BAE Systems has reiterated its forecast for flat earnings in 2018 while remaining upbeat about the progress of programmes in the UK and US.

BAE was buoyed by Philip Hammond's most recent Budget in which he pledged an extra £1bn for defence between now and the end of next year to modernise key areas such as anti-submarine warfare.

BAE was one of a number of companies to come under fire for selling arms, such as the Eurofighter Typhoon fighter jet, to Saudi Arabia in the wake of the murder of journalist Jamal Khashoggi last month. This is the first trading update it has given since the outcry.

The firm said: "Whilst a degree of geopolitical turbulence exists, the potential pipeline for Typhoon remains positive with opportunities both with partner nations and through exports."

Saudi Arabia later admitted that Khashoggi was killed at the Saudi consulate in Turkey, giving the explanation that it was following an interrogation "that went wrong".

Gruesome reports of how Khashoggi's body was disposed of have emerged since the killing. Turkish officials have claimed that his body was dissolved in acid after it was dismembered at the consulate in Istanbul.

Earlier this year the Ministry of Defence (MOD) awarded BAE Systems with a new £1.5bn nuclear submarine contract while also pledging £900m for one of its existing programmes as the defence secretary repeated the need for the UK to have a deterrent.