The Chancellor has levelled the playing field for the issuing of bonds aimed at Islamic investors, by removing a stamp duty barrier.

It was also confirmed the Treasury will continue to investigate the issuing of sovereign bonds.

Peter Muir, tax partner at Deloitte, said: "This will enable overseas investors to invest in bonds issued out of the UK market, thus removing a hindrance to the continued expansion of the Islamic finance market in the UK."

He added: "The government has also used the Budget to announce that they will take further powers to enable them to facilitate a sovereign sukuk issuance when their feasibility work has been completed."

Saftar Sarwar, a private banking manager at Barclays Wealth in Glasgow and a member of the Islamic Finance Council, said: "Hopefully the consultation will find there is a need and a demand, and give investors the opportunity to participate in a sovereign bond issue."