The pound rallies thanks to signs of a deal on Brexit
STERLING jumped to a six-week high on Monday after Michel Barnier signalled that a Brexit deal is within sight. The pound was up nearly 1 per cent versus the dollar at 1.302 and gained 0.4 per cent against the euro to end the session on 1.122. It came after the EU's chief negotiator said a Brexit deal could be achieved within the next six to eight weeks. "If one person can shift sterling at the moment it is Michel Bamier. The currency is desper-ate for any signs of good news from the EU's chief negotiator, often making the most of some pretty tepid statements. "Monday's gains seem slightly more justified however, with Ramjet saying that it was a `real-istic' possibility a deal could be reached by November. And though, of course, the content of any deal is the thing that really matters, at the moment the pound will take what it can get," said Connor Campbell, financial analyst at SpreadF2t. The pound - which has taken a hammering in recent weeks as fears mount that Britain is set to crash out of the EU without a deal - was also spurred on by better-than-expected figures for the UK economy. The Office for National Statis-tics (ONS) said the economy expanded 0.3 per cent in July, while gross domestic product (GDP) rose 0.6 per cent on a three-month basis, driven by construction and services. The pound strengthening knocked the FTSE 100, which closed the session flat. London's top flight ended the day up 0.6 points at 7,279.3. Primark owner Associated British Foods closed down 13p at 2,257p after the firm warned it will take a £20m hit due to the stronger pound. While its full-year outlook for the group is unchanged -with "progress" expected in adjusted operating profits and adjusted earnings per share - unfavourable exchange rates are expected to drag on results. Also in the doldrums was Debenhams, which has enlisted the services of KPMG to help draft emergency plans to save the troubled retailer. The department store is said to be considering a list of options including a company voluntary agreement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops. The retailer's stock sank I.3p, or 10.7 per cent, to end the day on 111/2p. Meanwhile, Dignity shares crashed after rival Co-op fired the latest salvo in the sector's price war. Co-op Funeralcare said over the weekend it is reducing the cost of its "simple funeral" by £100 to £1,895, and by a further £200 for its 4.7 m members. Charles Hall, analyst at Peel Hunt, believes that if Dignity tries to respond by itself lower-ing prices, it could wipe £1.5m off its profits. Shares ended down 55p at 977p. In Europe, Germany's DAX was up 0.22 per cent while France's CAC closed up 0.33 per cent A barrel of Brent Crude was trading at 77 US dollars, a rise of 0.6 per cent. The biggest risers on the FTSE 100 were London Stock Exchange Group up 82p at 4,726p, Royal Bank of Scotland up 4.3p at 249.3p, Morrisons up 4114p at 266.15p and Experian up 30p at 1,920p. The biggest falters on the FTSE 100 were Melrose Industries down 9.9p at 216.3p, Fresnillo down 21.6p at 812.4p, Glencore down 5.2p at 290314p and Easylet down 21p at 1,419p.