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Greece deal rumbled by China devaluation

GreeceTue close: Greece and its creditors reached an agreement on a third bailout for the country after a marathon session of talks.

The €86bn deal, however, failed to halt a slide in UK stocks after China’s central bank devalued its currency, adding to concerns about the slowdown in the world’s second largest economy.

The People’s Bank of China cut the renminbi’s daily fixed rate to the dollar by 1.9% to 6,228, the most on record.

The dollar appreciated following the decision, sending shares in Glencore, BHP Billiton, Antofagasta, Rio Tinto and Anglo American lower.

“The commodity-related companies are feeling the pain of the Beijing decision, and faith won’t be restored in the metals industry until Beijing’s actions show signs of improvement,” said David Madden, market analyst at IG.

Back home, Bank of England policymaker David Miles said disclosed that he almost voted for higher interest rates at the policy meeting last week, suggesting the MPC is closing in on a change.

His concern is that the longer the Bank leaves rates at 0.5%, the faster they may need to rise in the future.

Figures today showed retail sales increased at a slower annual rate in July as wet weather hurt spending on food for barbecues. Retail spending climbed 2.2% year-on-year last month after rising 2.9% in June.

Prudential gained after reporting a better-than-expected 17% rise in first-half operating profit and lifted its interim dividend, pointing to strong performances in all of its business units.

Ladbrokes declined after posting a 44% drop in adjusted first-half profit to £24.7m, reflecting lower betting on football.

Serco reversed earlier gains after maintaining its full-year profit guidance and reporting a better-than-expected fall in revenue in its first half.

Standard Chartered slumped on news it was the second biggest bank to walk away from the Carmichael coal mine in Australia in a week.

The FTSE 100 closed down 106% at 6,664.54

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