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Bank rises on speculation of it leaving London

HSBC HQ websiteMon: HSBC was a high riser as Standard Life Investments’ head of equities, David Cumming, said it would back the bank if it decides to relocate its headquarters outside the UK to escape increasingly burdensome regulations.

The Bank of England is set to issue its latest stress tests, designed to check whether banks had sufficient capital to withstand another financial crisis.

Mr Cumming told BBC Radio Four’s Today programme that SLI “along with a lot of other shareholders” would be supportive of a move to a new tax domicile by HSBC.

He said: “Obviously we need stress-tests and banks should have prudent capital. But I think this ongoing process of continually… moving the goalposts and with the Financial Policy Committee coming up with new wheezes in terms of getting the banks to hold more capital – I think HSBC are very, very close to losing patience with this never ending process.

“And I think a lot of shareholders, including ourselves, would be supportive of them moving, given the current situation in terms of regulation.”

Aerospace and defence stocks Rolls-Royce and BAE Systems gained as prime minister David Cameron announced a £12 billion increase to the defence budget.

Tesco dropped it emerged that losses at Harris & Hoole – the coffee chain part-owned by the supermarket retailer – doubled last year following a rapid expansion. Pre-tax losses at the coffee chain widened to £25.6m in the year ending 1 March 2015 from £12.8m the previous year.

London ended lower amid speculation on whether the Federal Reserve will raise interest rates at its meeting next month.

Federal Reserve Bank of San Francisco president John Williams said over the weekend that there is likely to be a “strong case” for raising interest rates next month following a batch of upbeat economic data.

There was stronger manufacturing activity in the eurozone though it is not likely to dissuade the ECB from easing monetary policy.

The FTSE 100 fell 29.14 points to 6,305.49

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