FTSE benefits as negativity drags sterling

Market report Emma Newlands

The pound fell to its lowest level against the US dollar since early September amid political uncertainty and concerns regarding the health of the UK economy. Sterling was trading lower by 0.8 per cent at $1.312 versus the greenback, marking its lowest point since 7 September.

The currency’s losses were more subdued against the euro, down 0.4 per cent at €1.121.

It gave a boost to the FTSE 100, which ended the day up 40.41 points at 7,507.99.

Sterling’s fall was first prompted by poor car sales figures, which showed a year-on-year 9.3 per cent drop and marked the sixth consecutive month of declines. The pound was also hit by rumours that Prime Minister Theresa May could step down.

However, Neil Wilson, a senior market analyst at ETX Capital, said it was “unfair to write her political obituary just yet… she is likely to soldier on”. He added: “Worries about the economy – and therefore the Bank of England’s willingness to raise rates – are of equal concern and this is perhaps why sterling is back to where it was before the 14 September [monetary policy committee] hawkishness.”

In UK stocks, education group Pearson edged higher by 2.5p to 616p after successfully offloading its 22 per cent stake in its publishing unit Penguin Random House.

The biggest risers on the FTSE 100 included Anglo American, up 43.5p at 1,473.5p, Glencore, up 10.9p at 370.3p, and Antofagasta, up 23p at 996.5p. The biggest fallers included Aviva, down 8.6p to 490.3p, Next ,down75pat 5,170p and Smurfit Kappa Group ,down32p at 2,350p. The Alton Towers owner rose to the top of the FTSE 100, after rumours of potential deal to buy part of Seaworld to help its global expansion. The sofa chain fell after revealing that it booked a 22.3 per cent fall in annual pretax profits, hit by factors such as falling consumer confidence.