Sterling climbs on hopes of wage growth
London’s blue chip index was under pressure yesterday as sterling climbed on hopes of positive data on UK employment.
The FTSE 100 ended the day 66.36 points lower, closing down 0.91% at 7,198.2.
The pound was up 0.61% against the dollar at 1.432. Against the euro, the pound was up 0.44% to 1.157.
UK unemployment is expected to remain constant at 4.3% in data published today, but average earnings are forecast to rise to 3% in the three months to February, meaning wage growth could overtake inflation for the first time in over a year.
This could also encourage a “more hawkish” tone at the Bank of England’s next meeting in May, according to Fiona Cincotta, senior market analyst at City Index.
She added: “The index was weighed down by a combination of a weaker oil price, a stronger pound and a large sell-off in WPP and Evraz, although a rally in the US helped lift the FTSE into the close.
“Investors concentrated on putting the US-led military bombings against Assad’s regime behind them and fortunately there is plenty for them to focus on.”
In oil markets, Brent crude prices were down 1.3% at 71.64 dollars a barrel, as fears cooled about tensions in the Middle East.
In UK stocks, traders sold off WPP’s stock in the wake of the resignation of long-standing chief executive Sir Martin Sorrell.