Shares in Britain's biggest defence manufacturer are booming after Trump victory

Shares in British arms giant BAE systems have rocketed following Donald Trump’s shock victory in the US presidential election.

Analysts speculated investors were betting defence spending would rise internationally when Mr Trump takes office, causing the value of weapons manufacturing to soar.

BAE systems, which earns around 40 per cent of its almost £8 billion revenue in America, saw its stocks rise 7 per cent.

Mr Trump has said he will increase the US Army by 75,000, to 540,000 soldiers, increase the Navy by 42 ships to 350 and bolster the airforce with an additional 1,200 war planes.

The Republican’s attacks on Nato and perceived allegiance to Russian President Vladimir Putin are also thought to be behind the spike.

If Europe were no longer able to count on American military support it would have to increase its own spending, analysts speculate.

There also speculation Mr Trump would demand Nato allies meet the two per cent of GDP spending, which only 5 out of 28 countries do currently.

BAE systems is involved in building a vast range of weapons and defence equipment and sells arms to customers in over 100 countries around the world, according to Campaign Against the Arms Trade (CAAT).

War planes made by the British company are currently in use in Saudi Arabia's controversial war in Yemen, where an estimated 10,000 people have been killed.

The Saudi-led coalition has been repeatedly criticised for attacking civilian targets in the war-stricken country, including hospitals, schools, factories and marketplaces.

According to CAAT, there is an overwhelming weight of evidence that Saudi Arabia has breached international humanitarian law in the country, and it was "inevitable" British-made weapons were involved in the breaches.