SHARES in British American Tobacco rose markedly yesterday after US regulators shelved plans to force tobacco firms to slash the amount of nicotine in cigarettes.

The proposal was unveiled by the US Department of Health and Human Services two years ago, but was put on hold on Wednesday, according to a regulatory document.

The plan would have been highly likely to cut tobacco sales sharply, and so comes as a major boost to tobacco firms.

British American Tobacco shares rose 3.9 per cent yesterday on the London Stock Exchange, ending the day worth 2,971.5p.

"This is clearly good news for the tobacco industry: effectively the nicotine standard is no longer on the 'to-do' list," said Nico von Stackelberg, an analyst at broker Liberum. But he said US regulators have left the door open, meaning a rule change could yet come.

(c) 2019 City A.M., source Newspaper