Robust manufacturing and industrial data helps push up the pound
The stronger pound weighted on the FTSE 100, which ended the day down 0.68%
The pound has been sent to one-week highs on the back of strong UK manufacturing and industrial data that outstripped economist expectations.
It helped sterling rise 0.4% to 1.320 against the US dollar, where it hovered at its highest level since November 2 – and 0.3% versus the euro to 1.132.
The stronger pound weighed on the FTSE 100, which ended the day down 0.68% or 51.11 points at 7,432.99 points.
It came after official statistics showed that Britain’s industrial sector has enjoyed its strongest run for nearly 25 years in September.
David Madden, a market analyst at CMC Markets UK, said: “GBP/USD was given a boost on the back of the robust British industrial and manufacturing output reports, which came in at 2.5% and 2.7% respectively. The growth rate was higher than economists’ expectations.
“The announcement spurred buying in sterling again as it has been trading within a tight range recently. The pound’s push higher since March is still in place, although it has been a bit lethargic lately.”
There was also good news on the trade gap, which shrank by £700 million in September to £2.75 billion.
It helped the pound more easily shrug off news that the UK’s construction industry had technically entered recession for the first time in five years.
Across Europe, the French Cac 40 and German Dax fell 0.5% and 0.42%, respectively.
Brent crude prices rose around 0.1% to $63.84 per barrel, as a string of arrests allegedly linked to corruption claims in Saudi Arabia raised fears of further tensions in the Middle East, and investors held out hope for a production cut extension at the Opec meeting slated for November 30.
In UK stocks, London Stock Exchange shares edged lower by 13p to 3,720p after confirming it would hold an extraordinary meeting before Christmas to decide the fate of its chairman and chief executive following intense pressure from an activist investor.
The meeting was called for by the Children’s Investment Fund Management (TCI), in hopes of removing chairman Donald Brydon, having accused him of pushing out CEO Xavier Rolet.
EasyJet shares rose 5p to 1,275p amid news that travel sector veteran Johan Lundgren would replace long serving Carolyn McCall as chief executive on December 1.
Ms McCall will remain with the airline until the end of the year to assist with the transition, the company said.
Ferguson – formerly known as Wolseley – dropped 20p to 5,295p as the plumbing supplier struck an agreement to offload its Nordic building materials business to US private equity firm Lone Star Funds for one billion euro (£885 million).
Broadband and landline providers saw shares dip into the red after Ofcom announced plans for a new compensation scheme that will automatically credit customers for slow repairs, missed appointments, or delayed installations starting in early 2019.
It is expected to result in around £142 million in customer payouts per year.
BT shares fell 1.25p to 247.75p, while Sky dropped 2p to 918p.
The biggest risers on the FTSE 100 were J Sainsbury up 3p to 232.2p, Barratt Developments up 8p to 620p, Merlin Entertainments up 4.4p to 383p and Imperial Brands up 27.5p to 3,181.5p.
The biggest fallers on the FTSE 100 were Bunzl down 151p to 2,157p, SSE down 34p to 1,360p, Burberry Group down 41p to 1,746p and GlaxoSmithKline down 28.5p to 1,318p.