FTSE boosted by pound’s fall over forecasts

Market report Emma Newlands

The pound was one of the worst-performing currencies after the Bank of England’s latest economic forecasts disappointed investors who were hoping for a more hawkish stance from policy-makers.

Sterling began its descent at midday following the release of the central bank’s February Inflation Report and interest rate decision. It hiked UK growth forecasts for 2017 and the next two years, but left inflation forecasts more or less unchanged.

Bylateafternoon,thepoundwasdownaround 1 per cent against the US dollar at $1.253 and dropped 1.2 per cent against the euro to €1.160. It boosted London’s blue-chip index, which rose 33.1 points to end the day at 7,140.75. Multinational firms listed on the FTSE 100 benefit when foreign currencies are stronger than the pound.

In UK stocks, Royal Dutch Shell’s “B” shares rose 35p to 2,258p despite the oil giant posting an8percentdropinprofitsto£2.7billion.investors were instead cheering news of strong cash flow, debt reduction and further strides in its sell-off programme.

Thomas Cook shares rose 0.5p to 89p, and TUI rose 9p to 1,162p, despite news that the European Commission launched an investigation into claims some customers were blocked from getting the cheapest holiday prices.

The biggest risers on the FTSE 100 included Smurfit Kappa Group, up 94p to 2,162p, Reckitt Benckiser Group, up 279p to 7,109p and Randgold Resources, up 200p to 6,815p. The biggest fallers included Worldpay, down 7.6p to 280.1p, Capita, down 12.1p to 486.9p and Johnson Matthew, down 42p to 3,240p. The catering giant exceeded expectations with a trading update unveiling a 2.8 per cent jump in organic sales for the three months to 31 December. After it issued a trading update, an analyst said “the woe continues” at Aberdeen Asset Management “as funds continue to flow in the wrong direction”.