Election talk sends pound plummeting

Fevered speculation throughout the day that Prime Minister Boris Johnson could call a snap general election helped the pound continue its freefall against the US dollar.

In response, the FTSE 100 rose by a similar margin, with foreign investors enjoying the weak pound and international London-listed businesses seen as a safe haven from the ongoing political and economic uncertainties in the UK.

The FTSE 100 closed up 74.76 points, or 1.04% at 7,281.94.

The pound was down 0.82% against the US dollar, with a single pound worth 1.2064.

Against the euro, the pound fell 0.61% to 1.0998 euros.

David Madden, market analyst at CMC Markets UK, said: “The FTSE 100 is soaring thanks to the drop in sterling.

“The international nature of top tier British equity market means a slide in the pound helps the constituents of the index.

“The FTSE 250 is a better reflection of the UK economy, and the market is up 0.4%, which is impressive when you consider the prospect of voters going to the polls.”

In company news, Marks & Spencer propped up the bottom of the leading index, closing down 2.65p at 189.6p, with investors fearful that the high street stalwart is about to be dumped out of the FTSE 100 for the first time in its history.

Analysts explained this may be due to investment products that track the FTSE 100 needing to sell up their shares in M&S, as it will no longer be followed.

At the top end, drug firm AstraZeneca was one of the strong risers, closing the day up 215p at 7,533p, after getting positive news on its diabetes and heart disease drug Brilinta.