Sterling toils in ‘muddied’ Brexit waters

Market report Hannah Burley

Sterling started the week on the back foot, shedding 0.6 per cent versus the dollar to end the session at $1.288 and falling 0.7 per cent against the euro at €1.108.

Disappointing manufacturing figures helped drag the pound down, with output falling to its lowest level in more than two years in August following a collapse in overseas demand.

Brexit also reared its head, with EU negotiator Michel Barnier rebuffing Theresa May’s Chequers plans.

David Madden, market analyst at CMC Markets, said: “There is still uncertainty surrounding Brexit. Once again, the water has been muddied regarding the discussions, and while there is no easy end in sight, pressure is likely to remain on the pound.”

The FTSE 100, meanwhile, feasted on the pound’s weakness, closing up 0.97 per cent at 7,504.6p and snapping a three-day losing streak.

A weaker pound boosts earnings for multinationals, which report in dollars.

Royal Mail shares surged up 13.5p to 461.5p after the postal firm splashed out £213 million to acquire Canadian delivery company Dicom.

WPP shares flatlined after the ad giant confirmed Mark Read is to become chief executive, months after the departure of long-standing boss Sir Martin Sorrell in controversial circumstances. The stock ended up 2p at 1,276.5p.

The biggest risers on the FTSE 100 included Smurfit Kappa, up 100p at 3,230p, and Standard Life Aberdeen, up 7.6p at 324.5p.

The biggest fallers on the FTSE 100 included United Utilities, down 14.6p at 727p, and Tui, down 21.5p at 1,400.5p.