The pound ral­lies thanks to signs of a deal on Brexit

Yorkshire Post - Business - - BUSINESS / MARKET REPORT -

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.

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