Sterling on the rise as FTSE hits new high

Sterling has surged to its highest level against the US dollar since the EU referendum result, following reports that finance ministers from Spain and the Netherlands will push for a “soft Brexit” deal.

The pound was up more than 1% versus the greenback at 1.368 after Bloomberg revealed that finance ministers from both nations aimed to support a divorce agreement that keeps Britain as close to the European Union as possible.

The UK currency was also capitalising on the US dollar’s weakness in response to American consumer inflation slowing to 0.1% in December.

Versus the euro, sterling was 0.3% higher at 1.128 euros.

The move came as the FTSE 100 Index continued its remarkable run by securing another all-time closing high, rising 15.70 points to 7,778.64.

The biggest risers on the FTSE 100 Index were GKN up 87.3p to 420p, Smiths Group up 84.5p to 1,652p, Marks and Spencer up 8p to 309.2p, WPP up 30.5p to 1,354.5p.

The biggest fallers were NMC Health down 62p to 3,102p, Shire down 66.5p to 3,581p, British American Tobacco down 82p to 4,968p, Direct Line Insurance down 5.3p to 371p.

The pound was up more than 1% against the dollar.