Sterling and equities rise on Brexit breakthrough hopes

City of London

Markets have been reaching new heights (pic: Terry Murden)

Sterling and equities received a long-awaited boost today from hopes of a breakthrough in the Brexit talks.

The FTSE 100 closed up 60.7 points (0.84%) at 7,247, with Lloyds Banking Group the biggest riser, up 12.2% as domestic companies enjoyed a pick-me-up from weeks of gloom.

Royal Bank of Scotland (up 11.4%) and the builders Persimmon and Barratt were other big risers, driving the UK-focused FTSE 250 up more than 4.2%.

Sterling enjoyed its best two days since 2017 and a three month high against the US dollar, up more than 1.7%.

Dean Turner, economist at UBS Wealth Management said sterling investors will be “cheered” but recommended they remain “nimble” in view of the continuing uncertainty that a Brexit deal will be reached.

“An extension followed by a call for a general election is still the most likely outcome, in our view, and we would expect to see sterling trade between 1.25-1.29 against the dollar,” he said.

“However the possibility of a deal has undoubtedly increased, which could further prolong sterling’s rally. In our view, a benign deal could see £/$ rallying to 1.35 and €/£ dropping into the low 0.80s.

“Clarity will be key, as we await further details on what the Prime Minister has agreed (if anything) and whether it stands a fighting chance of getting through parliament.”

See also:

US and China poised to sign first phase trade deal

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.