FTSE benefits from pound’s Brexit caution

Parliamentary drama helped push the FTSE 100 higher as the pound dropped against the dollar and the euro.

London’s top index rose 48.85 points, or 0.68 per cent, to 7,212.49 as the country prepares for a crunch vote on Brexit. The index often benefits when the pound falls as it is full of exporters who can sell their products cheaper abroad.

MPS were set to vote on the future of Boris Johnson’s plans to push through Brexit by 31 October later in the day.

Pound traders have been cautious, waiting on the vote before making any big moves. Sterling lost around 0.1 per cent against the dollar to $1.2949 by market close, but was lower earlier in the day.

Fiona Cincotta, an analyst at City Index, said: “As we have seen from recent macroeconomic data and company result, months more of Brexit uncertainty is not favourable for the UK economy or the pound either. The Bank of England has hinted that it could be forced to cut interest rates should Brexit uncertainty continue.”

The falling pound made sure that London was the best-performing major blue-chip index in Europe yesterday.

In company news, package holiday business On The Beach said it is set to cash in on the collapse of rival Thomas Cook, nudging shares 3.8 per cent higher at 453.2p.

Premier Inn owner Whitbread has posted lower profits in the first half of the year as it was weighed down by “difficult” UK trading conditions. The company saw like-for-like UK accommodation sales decline by 3.6 per cent. Shares closed down 1.9 per cent at 4,125p.