FTSE fails to capitalise on sterling slump

Market report

The pound fell to a 31-month low, as the latest UK economic growth figures showed an unexpected contraction in the second quarter.

But even the currency’s slump could not lift the FTSE 100, which usually benefits from sterling’s weakness, as the global economic mood darkened. The pound was trading as low as $1.206 around lunchtime, before ending the day just under $1.208, down 0.54 per cent. This was its lowest level since January 2017. The pound was also 0.7 percent lower against the euro at €1.077.

Fiona Cincotta, senior market analyst at City Index, said: “The outlook for the pound remains extremely fragile as the prospect of a no-deal Brexit increases.

“With the blame game between the EU and the UK in full swing, the chances of the two sides renegotiating the Irish backstop appears slim; instead, preparations for a worst-case scenario, no-deal Brexit are being prioritised.”

Nevertheless, the FTSE 100 closed down by 32.05 points, or 0.44 per cent lower, at 7,253.85.

In London, William Hill saw half-year profits cut by almost half after the bookmaker was hammered by the government crackdown on fixed-odds betting terminals. But shares jumped 9.5p as investors cheered prospects for US expansion.

Security contractor G4S said it plans to split off its cash-handling business and focus on its main security operations. Shares inched up 1.45p to 185.15p.

Drugs giant Astrazeneca saw shares push 124p higher to 7,351p after saying its top-selling drug Tagrisso had helped the prognosis of patients with a specific type of lung cancer.