VAT down 2.5% FTSE up 10%

The UK chancellor stated that VAT in the UK would be reduced by 2.5%
The financial markets responded by an approximatley 10 % increase in the FTSE
Does this make sense ?
Does a 2.5% reduction in VAT mean that the British public are going to rush out and start spending money and thereby pull the economy out of recession ?
Have the fundamental problems in the economy been corrected ?
The answer is no to both questions
The chancellor also stated that the estimate for GDP performance next year would be a contraction of approximately 1.25 %
He also stated that government borrowing is going to increase and subsequent tax increases will be required
None of these statements should give a feeling of optimism
Then why did investors rush in to buy shares ?
This is pure speculation
Nothing has changed
It is only a politician's statement about a change in taxation that will probably not have a significant impact
The movement of the market over the coming period should show us if the speculators were right to rush in or whether they should have had a little patience