Rate remarks offer support for top flight

Market report Scott Reid

Dovish comments by Bank of England ratesetter Ben Broadbent helped buoy the top flight. The UK’S benchmark share index, the FTSE 100, ended the day up 1.2 per cent or 87.17 points at 7,416.93, maintaining momentum after deputy governor Broadbent said he was not yet ready to vote for a rate hike.

Those comments initially weighed on the pound, but sterling was later boosted by UK data showing that unemployment fell to a 42-year low.

David Madden, market analyst at CMC Markets UK, said: “The FTSE 100 was given a boost by the deputy governor of the Bank of England, Ben Broadbent, when he stated the UK should not raise interest rates.

“The central banker is content with the state of the British economy but feels there are a few unknowns, and in turn would prefer to keep rates where they are.”

Burberry shares rose 50p to 1,630p as the luxury retailer reported a 3 per cent increase in retail sales to £478 million in the three months to 30 June, while like-for-like sales rose 4 per cent. But Carillion plunged 20.7p to 57.2p, taking a further hit after it warned over earnings and an £845m write-off on construction contracts earlier this week. The construction and infrastructure giant has lost nearly two-thirds off its stock market value since Monday.

Amec Foster Wheeler tumbled 25p to 430p after the company was dragged into a Serious Fraud Office probe into alleged bribery and corruption at Monaco-based energy firm Unaoil. It comes amid plans for a takeover by Wood Group, which saw shares slump 22p to 601p. New Burberry boss Marco Gobbetti unveiled rising first-quarter sales as he pointed to a “time of great change” for the luxury fashion house. Shares fell after the Fraud Office launched an inquiry into alleged corruption as part of a wider investigation into energy services outfit Unaoil.