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Friday 20 September 2019

Pound climbs higher on economic data but markets still uncertain

The FTSE 100 was flat.

UK economic growth met expectations in the third quarter (PA)
UK economic growth met expectations in the third quarter (PA)

By Press Association City Staff

Sterling was higher on Friday as the UK economy kept up with expectations, but uncertainty still hovered over the markets after a rough week.

The pound was stronger on the back of the latest UK economic data, which confirmed growth during the third quarter was 0.6%, although business investment is crumbling as firms are spooked by Brexit.

Meanwhile, the French economy ended the year on a weaker note, with consumer spending down in November and quarterly growth below expectations. This impacted the euro, helping the pound to gain on the common currency.

Sterling was 0.53% higher against the euro at 1.111 and up 0.13% on the dollar at 1.267.

Volatility has been low this session as many traders are squaring up their positions ahead of Christmas David Madden, CMC Markets UK

The FTSE 100 was almost flat, rising 0.14%, or 9.24 points, to 6,721.17.

David Madden, market analyst at CMC Markets UK, said stock markets were quieter ahead of Christmas.

“Stocks are mixed heading into the close and volatility has been low this session as many traders are squaring up their positions ahead of Christmas,” he said.

“It has been a rough week for equities as investors are worried about the state of the global economy, but comments from John Williams, a US central banker, have eased concerns a little.”

The French Cac was up 0.04% and the German Dax was 0.21% higher.

Oil prices continued to decline after plunging to the lowest level for a year on Thursday amid the prospect of an economic slowdown.

A barrel of Brent crude oil was trading at 54.21 US dollars, a drop of 1.4%.

In London, outsourcing giant Interserve remains locked in crunch talks with its lenders as it thrashes out a radical plan to cut its near-£650 million debt mountain.

The Government contractor – which holds crucial contracts for a range of services in prisons, schools and hospitals – on Friday said that those discussions are “constructive” and lenders are “fully supportive of Interserve’s business plan”.

Shares climbed 0.36p, or 3.31%, to 11.24p on the update.

Meanwhile, Vodafone has launched a search for a new auditor after it emerged that incumbent PwC is embroiled in a legal dispute with the telecoms giant.

The spat centres on the collapse of Phones4U in 2014, when mobile firms cancelled their contracts with the high street chain, triggering its administration.

Vodafone closed 3.22p, or 2.01%, lower at 156.74p.

Energy giant SSE announced that it will sell half of its telecoms network business to Infracapital for up to £380 million, days after it called off a merger with rival npower.

The deal values SSE Enterprise Telecoms at more than £700 million.

SSE said £215 million will be paid when the transaction is completed, which is expected at the end of June, and up to £165 million will be paid in instalments depending on the performance of SSE Enterprise Telecoms.

Shares in the company were 6p higher at 1,081p.

Aim-listed Fishing Republic, which sank into administration this week, was saved after it was sold to an unnamed third party buyer. The deal will save over 100 jobs.

The company’s shares remain suspended on the market.

The biggest risers on the FTSE 100 were CRH up 64.5p to 2,036p, Just Eat up 17.2p to 589p, Halma up 38p to 1,346p, and Anglo American up 48.4p to 1,751.6p.

The biggest fallers on the FTSE 100 were prudential, down 39p to 1,360p, DCC down 150p to 5,810p, Carnival down 96p to 3,781p and Vodafone down 3.22p to 156.74p.

PA Media

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