| 15.9°C Belfast

Pound slips back after surge following Theresa May's Brexit speech


The pound fell back after Tuesday's gains

The pound fell back after Tuesday's gains

The pound fell back after Tuesday's gains

The pound lost its footing on Wednesday as the dollar strengthened and investors backtracked on initial enthusiasm around Prime Minister Theresa May's Brexit speech.

Sterling slumped more than 0.7% to 1.231 against the US dollar, after climbing more than 3% to 1.241 a day earlier.

Against the euro, the pound fell 0.5% to 1.153.

It gave a minor boost to the FTSE 100, which closed 0.38% higher at 7,247.61 points, having shed £27 billion on Tuesday.

Multinational stocks on the blue chip index tend to benefit when international currencies are stronger.

Kathleen Brooks, a research director at City Index, said enthusiasm over Mrs May's Brexit plans may be waning.

"After the rapturous reception to Theresa May's speech, today sterling traders may be taking a finer look at the detail, and concerns may start to arise about Theresa May's tough line on Europe, saying that she would prefer no deal, rather than a bad deal with the EU after Brexit."

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required

A rebound in the dollar was also putting pressure on the pound.

The US currency was recovering after President-elect Donald Trump said the strong greenback was hurting US trade.

Sterling temporarily trimmed losses after fresh data showed unemployment plunged to its lowest total for more than a decade at 1.6 million in the three months to November.

Across Europe, the French Cac 40 fell around 0.13%, while the German Dax rose 0.5%.

In oil markets, Brent crude prices fell 0.6% to 55.13 US dollars per barrel (£44.70) as investors feared a rise in US output.

In UK stocks, BT Group shares fell 2.85p to 380.55p after communications regulator Ofcom fined its mobile phone arm EE £2.7 million for overcharging 40,000 customers for calling the company's service number while roaming within the EU.

Burberry shares rose 57p to 1,650p as the luxury fashion group hailed an "exceptional" festive performance in the UK as booming tourist trade helped send sales surging by around 40%.

Shares in Pearson - the former owner of the Financial Times - plunged 235p to 573p after the education publisher warned underlying profitability was £180 million lower than previously expected and said it was planning to sell its publishing unit Penguin Random House.

Shares in Mr Kipling cakes firm Premier Foods fell 5.25p to 42.75p as it warned full-year profits would be 10% lower than expected.

It also unveiled a "substantial" three-year cost-cutting plan, as it battles to offset soaring costs of ingredients.

Shares in Mitie sunk 9.7p to 195.8p after the embattled outsourcer issued its third profit warning since September in response to delayed contracts and a flagging performance from its cleaning division.

JD Wetherspoon shares rose 35.5p to 937.5p despite saying it would be hit by significantly higher costs like business rates and higher wages in the second half of the year, and warned sales could slow.

The biggest gainers on the FTSE 100 were Antofagasta up 26p at 747p, Burberry Group up 57p to 1,650p, Rio Tinto up 88.5p to 3,499p, and Hikma Pharmaceuticals up 42p at 1,956p.

The biggest fallers on the FTSE 100 were Pearson down 235p at 573p, Capita down 13.5p at 504p, Smurfit Kappa Group down 50p at 2,060p, and Barclays down 4p at 227.6p.