Slide in pound sees Footsie end on a high

The pound tanked as disappointing UK growth figures forced investors to question the likelihood of a Bank of England interest rate hike next month.

Sterling fell as much as 1.1 per cent against the US dollar in the wake of the data, which showed gross domestic product (GDP) grew by just 0.1 per cent – much worse than economists’ predictions.

But a weaker pound supported the FTSE 100, as many multinational companies are seen to benefit when foreign currencies are stronger.

London’s blue chip index ended the day up 80.78 points at 7,502.21 points.

Connor Campbell, a financial analyst at Spreadex, said: “Sterling was severely shaken by the UK’S first-quarter GDP reading, a troublesome figure made all the worse by the fact that the ONS warned March’s Beast from the East – a potential get-out-of-jail-free card for Q1’s abysmal growth–- actually had ‘very little impact’ on the slowdown.”

He added: “This immediately dealt a rather sizeable dovish blow to sterling, with a May rate hike from the Bank of England going from a near certainty at the start of the month, to a toss-up following Mark Carney’s comments last week, to now an almost complete dead end.”

Travis Perkins shares dropped 15p to 1,270p on news that the Wickes DIY chain owner suffered a 1.9 per cent dip in sales, which it blamed on weak consumer sentiment. Shares in Merlin Entertainments jumped 16.3p to 363p after it said trading at its London arm was in line with expectations, though it was still being impacted by the wave of terror attacks last year.