MARKET REPORT

THE pound lost steam yesterday afternoon as US employment data and jitters over a widely expected interest rate hike by the Bank of England (BoE) overshadowed a strong UK manufacturing report.

Sterling was down 0.16% versus the US dollar at 1.326 and was nearly flat versus the euro, up just 0.06% at 1.140.

Expectations for another interest rate rise by the US Federal Reserve increased following the release of ADP employment data, which showed that 235,000 jobs were added to the American economy in October.

It helped buoy the US dollar against the pound, which had previously been trading at its highest level against the greenback since early October thanks to better than forecast manufacturing figures.

The closely watched IHS Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 56.3 for October, up from 56.0 in September and coming in above economists’ expectations of 55.9.A reading above 50 signals growth.

But the pound also lost strength as investors prepared for what could be the first interest rate hike by the Bank of England for more than 10 years.

Members of the Bank’s nine-strong Monetary Policy Committee (MPC) are predicted to vote to raise rates from 0.25% to 0.5% on Thursday in the first such move since July 2007.

The FTSE 100 ended the day relatively flat, down 0.07% or 5.12 points at 7,487.96 points.

Across Europe, the French Cac 40 edged higher by 0.2% while the German Dax jumped 1.78% after being closed on Tuesday for a state holiday.

In UK stocks, miners were among the best performers with Glencore up 12.55p at 375.55p, Anglo American up 48.5p at 1,468.5p, and BHP Billiton up 44.5p at 1,407p.

Their shares were buoyed by data showing further growth in China’s manufacturing sector, which is one of the industry’s biggest customers.

Next was the biggest loser on the blue chip index, dropping 450p to 4,471p as the retailer warned over “extremely volatile” trading ahead of the crucial Christmas season as online sales continue to offset tough conditions on the high street.

The biggest risers on the FTSE 100 were Paddy Power Betfair up 345p to 8,050p, Glencore up 12.55p to 375.55p, Anglo American up 48.5p at 1,468.5p, and BHP Billiton up 44.5p at 1,407p.

The biggest fallers on the FTSE 100 were Next down 450p to 4,471p, Standard Chartered down 45.4p to 705p, Marks and Spencer Group down 15.3p at 328.8p and Admiral Group down 67p at 1,857p.