MARKET REPORT

STERLING took a tumble yesterday as the Bank of England kept interest rates on hold and warned that UK economic growth will remain “sluggish”.

The pound sank to a ninemonth low against the euro, slipping 0.8% to 1.11, as the Bank’s Monetary Policy Committee voted 6-2 to keep the cost of borrowing at a record low of 0.25%.

The UK currency also suffered versus the US dollar, dropping 0.6% to 1.31, giving up gains seen in morning trading.

In a contrast of fortunes, the FTSE 100 Index pushed higher following the announcement, closing up 63.34 points to 7,474.77 despite the Bank slashing its growth forecasts for the UK economy.

The gloomy outlook was compounded by the latest update from Britain’s dominant services sector, which eked out a small rebound last month.

In UK stocks, fashion giant Next was among the biggest risers after its full-year sales guidance improved slightly.

The high street bellwether said the recent hot weather had boosted its performance, with an 11.4% surge in Directory sales helping to offset another steep fall across its high street stores.

It said the warmer weather, together with an overhaul of its product ranges and online offering, saw total full-price sales rise by a better-thanexpected 0.7% in its second quarter to July 29.

This marked an improvement on the 3% drop seen in the previous three months and came despite a 7.4% drop in sales across its high street shops.

Shares were up more than 9%, or 388p, to 4,401p.

Struggling aerospace and defence firm Cobham took off on the London market after the company signalled its turnaround could be on track.

The FTSE 250 firm, which has issued a string of recent profit warnings, swung into the black in the first half of the year.

Pre-tax profits came in at £14.3m, compared to a £38.4m loss in the same period last year, with shares rising 11.3p to 145.3p.

The biggest risers on the FTSE 100 Index were Next up 388p to 4,401p, Randgold Resources up 240p to 7,235p, Imperial Brands up 100.5p to 3,305.5p, British American Tobacco up 150p to 5,004p.

The biggest fallers were Convatec Group down 19.7p to 289.3p, Mondi down 54p to 1,948p, Micro Focus International down 58p to 2,122p, Shire down 82p to 4,118p.