London’s blue-chip FTSE 100 index rose on Friday as it benefited from the weak pound in the wake of the Bank of England’s decision to hold interest rates steady.
The FTSE 100 index ended 0.17 per cent higher to trade at 7,691.98 although the mid-cap FTSE 250 index climbed 0.07 per cent to hit 18,651.75. Other markets around Europe dipped.
Sterling was trading 0.3 per cent lower against the dollar at around $1.2260. This benefited the exporter heavy FTSE 100. Miners and financial stocks performed strongly.
Markets were also given a lift by positive retail figures.
Retail sales volumes rose by 0.4 per cent in August 2023, partially recovering from a fall of 1.1 per cent in July 2023. The increase was driven by non-food store sales, which rebounded after unseasonable rainy weather in July drove shoppers off the high street.
GfK’s long-running Consumer Confidence Index also increased four points in September, although it remained at a subdued minus 21.
Expectations for the UK’s wider economy over the next 12 months saw a robust six-point increase to minus 30, 44 points higher than last September.
Martin Beck, chief economic advisor to the EY ITEM Club, said “Falling inflation alongside still-strong growth in cash pay mean real wages have started to rise again, following a sustained decline during 2022 and early 2023.
“A growing sense that interest rates have peaked following the MPC’s decision to pause rates in its latest meeting should support consumer and business sentiment,” he continued.
Danni Hewson, head of financial analysis at AJ Bell, was cautious however. “People still have a bit of cash, but there’s a long winter ahead and many consumers are hyper aware of their budgetary constraints,” she said.
On the FTSE, Ocado climbed around 5.0 per cent having slumped yesterday after a downgrade from Exane. Lloyds and Rightmove also saw solid gains.
At the opposite end, insurer Halma fell over 4.1 per cent.