Whispers of Brexit deal see sterling climb

Rumours of an agreement between the UK and EU on financial services sent the pound higher, supported by the outlook from the Bank of England as it maintained interest rates.

Sterling leapt 1.5 per cent to $1.297 and tracked 0.86 per cent higher against the euro at €1.138.

Reports suggested that a deal had been struck “in principle” which would give UK financial services access to the bloc after Brexit.

Omar Ali, UK financial services leader at EY, said the rumours were “welcome news”, but stressed that the deal is not yet done.

He said: “Any proposals based on current EU equivalence frameworks would not provide the access that firms currently get through EU passport, so the depth, breadth and enforcement mechanisms of any new arrangements will be critical.”

The Bank of England’s monetary policy committee held interest rates at 0.75 per cent.

Meanwhile, the FTSE 100 ended the day 13.44 points lower at 7,114.66, weighed on by oil stocks. Oil prices dipped again, as rising supply and a gloomy mood on the global markets weighed on sentiment.

Elsewhere on the London market, shares in Just Eat climbed 38.4p to 646p, despite its prediction that full-year performance will be dented by investment in fighting off rivals and expansion into Latin America.

The biggest risers on the FTSE 100 included Smith & Nephew, up 83.5p to 1,357p, and Melrose Industries, up 9.8p to 178.45p.

The biggest fallers on the FTSE 100 included Wood Group, down 33.2p to 681p, and BP, down 25.8p to 541.5p.