Pound under pressure on renewed fears over Brexit

THE POUND came under selling pressure on Thursday amid renewed fears over Brexit and comments by a Bank of England official that interest rates may be cut in a no-deal scenario.

Sterling was trading 0.5 per cent down versus the US dollar at 1.278 at the London market close, and the British currency shed 0.6 per cent versus the euro at 1.135.

Earlier on Thursday Gertjan Vlieghe, an external member of the central bank’s Monetary Policy Committee, warned that interest rates are more likely to be cut than hiked if Britain crashes out of the European Union without a deal.

“In the case of a no-deal scenario, I judge that an easing or an extended pause in monetary policy is more likely to be the appropriate policy response than a tightening,” he told an audience in London.

The rate setter also said that Brexit has already cost the British economy at least £80b, or £800m a week, since the referendum.

The pound’s slump also comes as Theresa May faces a series of votes in the Commons on Thursday evening as the Brexit saga rolls on.

Connor Campbell, financial analyst at SpreadEx, said: “Further Tory discord over Brexit - provoked by a poorlyreceived, debate-opening statement from Stephen Barclay which saw the MP suggest the Government was willing to exit the EU without a deal on March 29 - caused the pound to drop.

“That left cable the wrong side of 1.279 US dollars for the first time in over a month.”

Meanwhile, the FTSE 100 ended the day up 6.17 points, or 0.09 per cent, at 7,197.01.

In stocks, shares in drugs giant AstraZeneca were on the ascendancy despite the firm revealing falling annual profits.

The group reported a 17 per cent fall in core operating profits to 5.7b US dollars (£4.4b) for 2018.

Pre-tax profits fell 14 per cent with exchange rates stripped out, to 2b US dollars (£1.6b).

However, AstraZeneca added that a “very strong” end to the year saw total fourth-quarter revenues rise 14 per cent with currency effects stripped out to 6.4b US dollars (£5b), while core earnings lifted 23 per cent to 2.2b US dollars (£1.7b).

Shares closed up 428p, or 12 per cent, at 6,149p.

On the FTSE 250, shares in Wagamama owner The Restaurant Group tumbled after the firm announced that chief executive Andy McCue is to leave the company due to “extenuating personal circumstances”.

Mr McCue will remain with the company until his successor is recruited and it expects to make an announcement about his replacement in “due course”.

Shares dropped 16.2p, or 11.1 per cent, to 129.8p.

In Europe, Germany’s DAX was down 0.69 per cent and France’s CAC 40 shed 0.1 per cent.

A barrel of Brent crude was changing hands at 64 US dollars, a rise of 0.7 per cent.

The biggest risers on the FTSE 100 were Micro Focus International up 186p at 1,703.5p, AstraZeneca up 428p at 6,149p, Hikma Pharmaceuticals up 37p at 1,1766p and BAE Systems up 8.6p at 526p.

The biggest fallers on the FTSE 100 were Coca Cola HBC down 231p at 2,463p, Smurfit Kappa down 70p at 2,354p, Next down 133p at 4,826p and Tui down 21.6p at 809.2p.