Uncertainty takes toll on sterling but FTSE rallies

PARLIAMENTARY drama helped push the FTSE 100 higher on Tuesday 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 are set to vote on the future of Boris Johnson’s plans to push through Brexit by October 31 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, however was lower earlier in the day.

“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,” said Fiona Cincotta, an analyst at City Index.

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

France’s Cac closed the day up 0.17 per cent, while Germany’s Dax rose 0.05 per cent.

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 higher.

The online travel firm said the collapse of the 178-year-old UK tour operator created an

“unprecedented opportunity’’ to take additional market share.

Just Eat was propelled to the centre of a bidding war after investment firm Prosus announced a £4.9b bid to buy the food delivery group, months after it agreed a merger with Dutch rival Takeaway.com.

The board of Just Eat rejected the hostile approach, saying it “significantly undervalues’’ the business, and urged shareholders to do the same.

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 for the six months to September due to weaker sales outside of London.

Oil was up over the day after positive noises on trade relations between the US and China.

The Brent crude benchmark gained 1.2 per cent to 59.72 US dollars.

The biggest gains on the FTSE 100 were made by Just Eat, up 142.6p at 732p, Fresnillo, which rose 21p to 650p, St James’s Place, which gained 32p at 1,045p, Standard Chartered, up 18.6p at 683.6p, and Prudential, which rose 37.5p at 1,403.5p.

The worst losers on the FTSE 100 were Tui, which fell 75.7p to 990.8p, M&G, down 15.35p to 202.65p, Bunzl, which fell 55p to 1,943p, Antofagasta, down 17.4p

to 857.6p, and ITV, down 2.7p to 135.8p.

Household goods giant Reckitt Benckiser has slashed its annual sales outlook for the second time this year after a “disappointing’’ third quarter.

The group saw sales fall 0.3 per cent across its health division in the three months to September 30, leaving revenues overall growing by a muted 1.6 per cent to £3.3b.

Reckitt cut its expectations for full-year like-for-like sales growth to between zero and 2 per cent due to the poor third quarter and “seasonal uncertainty’’ in the final three months.

It comes after Reckitt lowered its revenue guidance in July.