Pound’s gains weigh heavily on blue-chips

Market report Emma Newlands

The pound’s rally picked up pace, notching up a fresh post-brexit-vote high as the US dollar continued to struggle across the Atlantic.

Sterling hit as high as $1.43 against the greenback, before trading up 0.2 per cent to $1.427 when the London market closed.

But the UK currency faced a tougher session versus the euro, trading 0.4 per cent lower at €1.142 despite the European Central Bank keeping its monetary policy stance unchanged.

The FTSE 100 Index closed down 27.59 points at 7,615.84, as the pound’s strength put pressure on blue-chip stocks.

Chancellor Philip Hammond said sterling’s resurgence had put the UK currency in a “sweet spot” by helping to alleviate the pain on consumers of Britain’s soaring inflation and paltry wage growth.

In UK stocks, broadcaster Sky lifted more than 1 per cent to 1,036p after it posted a leap in underlying half-year earnings to £1.1 billion.

It came as it added new customers and benefited from a hike in demand for pay-as-yougo products, such as one-off films and sporting events.

Just days ago, Britain’s competition watchdog provisionally blocked 21st Century Fox’s £11.7 billion bid to take full control of Sky.

The biggest risers on the FTSE 100 Index included Smith & Nephew, up 51.5p to 1,293.5p, Bunzl, up 68p to 2,009p, and Associated British Foods, up 77p to 2,861p.

The biggest fallers included Sage Group, down 17.6p to 750.6p, British American Tobacco,down106pto4,870pandrolls-royce Holdings, down 17.6p to 844p. On the second tier, the construction group surged after it offered reassurance over trading in the wake of Carillion’s collapse. The toymaker was derailed after warning of biggerthan-expected full-year losses as festive sales failed to arrive at management’s expectations.