FTSE rises as inflation data drags sterling

Market report Emma Newlands

Sterling fell to a ten-month low against the euro as weaker-than-expected UK inflation data weighed on the currency.

The pound was down 0.4 per cent against the eurozone currency at €1.096, marking its lowest level since October.

It comes after official UK inflation figures for July fell short of consensus estimates at 2.6 per cent. Connor Campbell, a financial analyst at Spreadex, said that while the level is “still troublesome”, it was not the expected 2.7 per cent and was far from the 2.9 per cent seen in May.

“And given that the Bank of England didn’t pull the rate hike trigger at that level, they’re not going to do it for anything lower, helping to explain why the pound found itself in such a bad mood once the figure was released,” he added.

Sterling also fell to a five-week low against the US dollar, down 0.7 per cent at $1.286. The move was also influenced by strong US retail figures, which bolstered the greenback.

Overall, the weaker pound supported the FTSE 100, which ended the day up 29.96 points at 7,383.85.

In UK stocks, RBS shares rose 3.5p to 263.1p as it confirmed that more than 800 IT jobs were at risk as part of a major reorganisation plan.

Amec Foster Wheeler fell 7.9p to 427.6p after offering to sell off various assets to help allay UK competition concerns over its proposed £2.2 billion takeover by Wood Group.

The biggest risers on the FTSE 100 included Easyjet, up 57p at 1,322p, and Old Mutual ,up 4.5p at 202p. The biggest fallers included Provident Financial, down 74p at 1,882p, and Randgold Resources, down 235p at 7,200p. The nightclub operator, already the subject of a takeover bid from Slug And Lettuce owner Stonegate, rebuffed a merger proposal from rival Deltic Group. The social housing and support service provider saw its share price lower amid news that the Grenfell Tower tragedy would hit profits.