Higher defence outlays may reignite European growth – but pressurise bonds

European aerospace and defence stocks have risen this year, following calls for greater expenditure and less reliance on the US. Ahead of today’s NATO summit, member nations are expected to agree a defence spending target of 5% of GDP, amid ongoing geopolitical tensions and shifts. The summit is expected to trigger a huge lay out on infrastructure, cybersecurity, vehicles and weapons, which could benefit economies. Global aerospace and defence sector equities have outperformed against the broader market this year, with the European stocks outstripping their US counterparts. However, investors...