Pound slump against dollar boosts FTSE

The pound lost ground after Britain’s manufacturing output undershot expectations, while shares in London were trading higher.

Sterling dipped 0.41 per cent against the US dollar to $1.264 after the release of the latest IHS Markit/cips UK manufacturing purchasing managers’ index, which showed a reading of 48 last month, down from 49.4 in May. It was the lowest reading since February 2013.

However, the pound was higher on the euro, climbing 0.38 per cent to €1.185, as the eurozone also reported gloomy manufacturing figures.

The pound’s weakness on the dollar helped to boost the FTSE 100, which was already in a good mood due to perceived progress on the trading relationship between the US and China. The blue-chip index gained 71.87 points, or 0.97 per cent, to close at 7,497.5.

Fiona Cincotta, senior market analyst at City Index, said the meeting between US leader Donald Trump and Chinese President Xi Jinping had boosted sentiment.

“For the time being, the existing import tariffs will remain in place, but the markets will live off the hope that the resumption of the discussions between US and Chinese trade representatives will help lift those sooner rather than later.”

In company news, Aston Martin’s biggest investor said it was looking to spend £68 million on another 3 per cent holding in the luxury car-maker. Shares in the company were up 20p to 1,025p.

Advertising and marketing giant WPP confirmed the sale of its 25 per cent stake in sports marketing agency Chime for an initial £54.4m. Shares closed up by 21.8p to 1,012p.