Shares in BAE Systems were up on the FTSE 100 in afternoon trading after the defence company downgraded its growth estimate's following the government's Strategic Defence and Security Review, announced earlier this week.

BAE said, in an interim statement covering the period from 1 July 2010 to 20 October 2010, that trading had been consistent with management expectations during the period.

However the group added that the SDSR was expected to lead to "some reduction in growth for 2010". BAE said that it would be working with the Ministry of Defence to "address the detailed implications of the changes identified by the SDSR" and added that it expected defence cuts to reduce its own earnings per share by one pence.

Although growth may be hampered in Britain as a result of spending cuts, BAE said that the US defence market was still generating "a substantial number of business opportunities despite budgetary pressures".

In unrelated news BAE said that the cancellation of an offshore patrol vessel programme by Trinidad and Tobago could cost it up to £150 million.

By 16:05 shares in BAE Systems were up 2.97 per cent on the FTSE 100 to 360.30 pence per share.