FTSE flat after pound slowed by rate nerves

Market report Emma Newlands

The pound tumbled against both the euro and US dollar after comments from a key Bank of England policymaker cast doubts over a widely expected interest rate hike in November.

Sterling fell more than 0.6 per cent versus the US dollar to around $1.311 and in excess of 0.7 per cent against the euro to trade at €1.115 after deputy bank governor Sir Jon Cunliffe suggested that a rate rise may not be delivered given concerns over Britain’s economic forecast.

Connorcampbell,afinancialanalystatspreadex, said: “The pound could well be in for a nervy few weeks, then, with the interest rate situation seeming to only get murkier as the November meeting grows closer.”

The pound’s drop weighed on the FTSE 100, which ended the day nearly flat, up just 2.09 points at 7,526.54.

It was also weighed down by Whitbread shares, which tumbled to the bottom of the blue-chip index after reporting a further slowdown in sales growth at its Costa Coffee chain, which itself suffered a 9.8 per cent drop in pretax profit to £59 million.

Bloomsbury shares edged higher by 1.5p to 163p after reporting a 15 per cent jump in total revenues to £72.1m in the six months to 31 August, while pre-tax profit jumped from £100,000 to £1.7m.

The biggest risers on the FTSE 100 included Antofagasta, up 28p at 1,031p, Standard Chartered, up 15.6p at 783.3p, and Rentokil Initial, up 4.7p at 326.3p. The biggest fallers included WPP, down 42p at 1,324p, Paddy Power Betfair, down 210p at 7,505p, and Convatec Group, down 5.7p to 207.3p. The troubled infrastructure giant received a boost after revealing its £50 million deal to offload the bulk of its UK healthcare arm to Serco. One analyst said the firm’s interim update was “stellar” but added that investors “took umbrage with the performance of Costa Coffee”.