It comes after the pound sterling jumped against the US dollar yesterday, taking an impact on the FTSE 100. The London index finished Monday in the red after the strong performance of the currency impacted stocks. The FTSE 100 is largely made up of businesses who largely trade on an international basis and are therefore vulnerable to changes in currency value.
Last night sterling was trading at $1.2855, up 0.48 percent on the day, while the dollar index fell 0.22 percent.
Stirling’s rise was largely due to the vote on Boris Johnson’s Internal Market Bill.
News of a possible revolt against Boris Johnson’s plans to break international law helped reverse some of the losses the currency racked up last week.
However, following the passing of the Bill in the late hours of yesterday evening, it is possible Stirling will drop again today, boosting the FTSE 100.
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FTSE 100: Stocks were dented yesterday as the pound surged
12.45pm update: Pound continues surge against US dollar
Sterling is ciontinuing its rise on Tuesday after better-than-expected jobs data and with Boris Johnson facing opposition from his own Conservative MPs to prposed legislation that would breach the Brexit withdrawal agreement.
The currency was 0.5% higher at $1.2908, moving away from two-week lows.
Against the euro, sterling also gained slightly, with the single currency down 0.1 percent at 92.15 pence.
The UK’s unemployment rate increased to 4.1 percent in the three months to July, but the number of people in unemployment fell by a much smaller-than-expected 12,000.
11.40am update: UK grocery sales hit by Eat Out to Help Out scheme
Britain’s grocery sales growth slowed to eight percent year-on-year in August – the lowest in four months.
Figures from market researcher Kantar show UK shoppers spent £155million less in supermarkets last month compared with July, as the scheme designed to get people to return to pubs, cafes and restaurants ran throughout the month.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery growth tailed off in August as the Government’s Eat Out to Help Out scheme got underway and people were encouraged to return to offices and resume normal routines.”
11.15am update: Covid compensation – 370,000 to share £1.2BN payout after landmark coronavirus ruling
A landmark coronavirus legal ruling means 370,000 people will share a payout of £1.2billon in a case related to insurance policies for businesses impacted by the pandemic.
The Financial Conduct Authority (FCA) brought a test case earlier this year over the wording of business interruption (BI) insurance policies, which some insurers argue do not cover pandemics – and responded to the decision by calling it a “significant step”.
The city watchdog previously said it was bringing the legal action following “widespread concern” over “the lack of clarity and certainty” for businesses seeking to cover substantial losses incurred by the COVID-19 pandemic and subsequent national lockdown.
According to the regulator, the value of policies likely to be affected by the test case is about £1.2 billion.
10.45am update: FTSE 100 continues surge
The London stock index is up 50.96 points on the day at 6077.21.
10.15am update: Pound jumps but analysts warn positive move could be short-lived
Sterling has increased following better-than-expected jobs data and after Boris Johnson cleared the first hurdle for legislation that would breach the Brexit withdrawal agreement.
The currency, which has plummeted in recent weeks as investors worries about the increasing risk of a no deal Brexit, was o.4 percent higher against the US dollar at $1.2891.
Versus the euro, the pound gained, with the single currency down 0.1 percent at 92.20 pence.
But despite this early encouragement, analysts warned sterling would continue to face downward pressure.
MUFG said in a financial note: “There appears to be no easy quick way out to resolve the latest gridlock in UK-EU trade negotiations.
“A deal is only probable very late in the day now and hence any short-term pound bounce will not last with potential big declines still to come.”
The FTSE 100 is up by more than one percent on the day
9.45am update: FTSE 100 continues strong start to the day
The FTSE 100 has conitnued to rise in what is proving to be a strong morning for the London stock market index.
At 9.45am, the FTSE 100 was up 34.31 on the day at 6060.56.
8.30am update: FTSE opens strong
FTSE has jumped 28 points in the first 90 minutes of trading today.
The UK index closed at 6,026 but has already risen to 6,054 this morning.
7.20am: UK wakes to bleak job numbers
The number of UK workers shrunk by 695,000 during the pandemic, according to figures released by the Office of National Statistics (ONS) this morning.
The ONS said the UK workforce shrunk by 695,000 between March and August this year.
Unemployment now sits at 4.1 percent, which is 0.3 percent higher than a year earlier.
The UK’s unemployment rate increased to 4.1 percent in the three months to July
6.05am update: Re-cap of Monday’s trading
The dollar weakened and world stock markets rallied on Monday on encouraging signs of progress in developing a COVID-19 vaccine, while several multi-billion dollar deals also helped lift the spirit of investors after the downdraft in the past two weeks.
Gold jumped almost 1 PERCENT as the dollar slid and bond yields were stable as investors gauge how the US Federal Reserve will put its new approach to monetary policy into practice and keep its dovish stance at this week’s policy meeting.
Pfizer Inc and BioNTech SE on Saturday proposed expanding their Phase 3 COVID-19 vaccine trial to about 44,000 participants, while increasing the diversity of the trial population.
Drugmaker AstraZeneca also said on Saturday it has resumed British clinical trials of its COVID-19 vaccine, one of the most advanced in development, after getting the green light from safety watchdogs.
“The market reacts positively to any vaccine news,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “We’re going to see a lot more vaccines come out, and that is what really is helping the markets.”