MARKET REPORT

THE pound slipped yesterday, weighed down by disappointing manufacturing data and fears over a Brexit spat between Britain and Spain over Gibraltar.

Sterling dropped 0.5% against the US dollar, taking it below the $1.25 mark to $1.247. Versus the euro, the UK currency fell nearly 0.6% to €1.170.

London’s blue chip index was also in the red, closing lower by 0.5% or 40.23 points to 7,282.69.

Investors were pulling away from the pound after senior Tory Lord Howard said he was certain that Prime Minister Theresa May would be ready to resort to war to defend Gibraltar as Margaret Thatcher did with the Falklands - prompting calls from Madrid for the UK to calm down.

Jasper Lawler, a senior market analyst for London Capital Group, said the row was reviving Brexit jitters.

“Gibraltar is the perfect example of the deep ties between the UK and the EU. Presumably a diplomatic solution can be reached without war between the UK and Spain but this demonstrates the kind of curve balls the negotiations will throw up.”

The UK currency was also weighed down by data from the Markit/CIPS UK Manufacturing purchasing managers’ index (PMI), which showed that manufacturing output slipped to its weakest pace of growth in eight months in March following a slowdown in consumer goods production.

Across Europe, the French Cac 40 and German Dax fell 0.7% and 0.4%, respectively.

In UK stocks, Lloyds Banking Group fell 0.29p to 66.03p after the Government cut its holding in the bank to 1.97%.

Shares in British chip designer and Apple supplier Imagination Technologies plunged 165.25p to 103p after revealing the US giant has said it will no longer use its products.

The biggest risers on the FTSE 100 were Provident Financial up 47p to 3,044p, Mondi up 28p to 1,955p, Micro Focus International up 27p to 2,305p, and Randgold Resources up 70p to 7,035p.

The biggest fallers on the FTSE 100 were Next down 154p to 4,166p, ITV down 5.6p to 213.3p, Prudential down 33p to 1,653p, and Standard Chartered down 14.7p to 748.3p.