Britain’s defence and aerospace stocks have proved a safe haven for investors during the credit crunch, managing even to defy fears over cuts in government defence spending.

Shares in the three largest companies, BAE Systems, Rolls-Royce and Cobham, have on average outperformed the FTSE 100 since the start of this year. Shares in mid-cap stocks such as Chemring have risen even more, showing a rise of 18 per cent in the past six months and up a remarkable 737 per cent over the past five years.