Belfast Telegraph

Sterling surges to two-week high

The pound jumped to a two-week high while London's top flight index edged down as markets reacted to the Bank of England's decision to keep interest rates on hold.

Sterling touched 1.34 US dollars before easing back to 1.33 US dollars after the Bank's Monetary Policy Committee (MPC) shocked investors by keeping the cost of borrowing at 0.5%. The pound was also up 1.5% against the euro at 1.20.

The announcement caused the FTSE 100 Index to fall back from a fresh 11-month high during the session to finish 15.9 points down at 6654.5.

It was widely predicted that the Bank would slash interest rates following governor Mark Carney's remarks signalling monetary easing in the wake of Britain's decision to quit the European Union.

Some economists took umbrage with the MPC's decision to keep the base rate at 0.5%, where it has remained since March 2009, with Alan Clarke, economist at Scotiabank, branding Mr Carney the "unreliable boyfriend".

He said: "Rates unchanged at 0.5% - one dissent for a rate cut. Are you Draghi in disguise? If ever there was a case for abandoning forward guidance and central bankers keeping quiet, this meeting is it. Virtually nobody was going for a rate cut at this meeting before Carney's intervention a couple of weeks ago.

"Most assumed that the weakness of the pound and the need to wait for incoming data would lead to a pause at least until August. But for no apparent reason, Governor Carney decided to tease the market, let it price in a high probability of a rate cut, only to disappoint. As if the situation wasn't volatile and uncertain enough, the Bank Governor poured petrol on the flames. This was a completely unnecessary intervention."

Across Europe, Germany's Dax and the Cac 40 in France were up 1.3%.

The price of oil bounced back from a slump in the previous session, trading up 1.8% to 47.08 US dollars a barrel despite mounting concerns over global growth.

In stocks, banks and mining stocks were among the biggest risers, with Anglo American up 31.2p to 843.4p and Royal Bank of Scotland 4.4p higher at 182.2p.

Away from the top tier, SuperGroup was in the ascendency on the FTSE 250, soaring 16% or 224p to 1565p, after profits were boosted by a fashion collaboration with actor Idris Elba.

The retailer said underlying pre-tax profit for the year rose 16.3% to £73.5 million while revenue grew 21.3% to £590.1 million. Trading in the final quarter was particularly strong, with like-for-like sales up 15.4%.

However, retailer Halfords saw its share price slump as its bike sales recovery skidded to a halt after it was hit by wet weather and the timing of Easter.

The car parts to bicycles firm posted a 4% drop in like-for-like bike sales in the 13 weeks to July 1.

A stronger performance from its car maintenance and travel solutions ranges failed to offset the bike disappointment, with overall first-quarter retail sales 1.2% lower.

Shares were down just under 2% or 4.3p to 330.6p.

The biggest risers on the FTSE 100 Index were easyJet up 51p to 1171p, International Consolidated Airlines (IAG) up 17.9p to 426p, Anglo American up 31.2p to 843.4p, St James's Place up 28.5p to 865.5p.

The biggest fallers were Marks & Spencer down 7.8p to 330.5p, Burberry Group down 29p to 1250p, Rex down 31p to 1390p, TUI down 20p to 972.5p.