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FTSE lifted as UK R rate falls and economy avoids double-dip recession

The FTSE 100 closed 61.07 points, or 0.94%, higher at 6,589.79 at the close of play on Friday.

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The FTSE 100 Index closed higher on Friday (Kirst O’Connor/PA)

The FTSE 100 Index closed higher on Friday (Kirst O’Connor/PA)

The FTSE 100 Index closed higher on Friday (Kirst O’Connor/PA)

The decrease in the UK’s R rate, Government confirmation of when it will unveil the roadmap out of current lockdown measures and better-than-expected economic figures for the past quarter all pushed the FTSE higher.

Sterling also made gains as traders were positive about the rate of the UK’s economic recovery.

Earlier on Friday, the Office for National Statistics (ONS) confirmed the UK economy dodged a double-dip recession amid 1% growth in the final quarter of 2020, ahead of a 0.5% forecast.

The FTSE 100 closed 61.07 points, or 0.94%, higher at 6,589.79 at the close of play on Friday.

Connor Campbell, financial analyst at Spreadex, said: “With the UK’s R value dropping below one for the first time since last July, and the Government confirming they will issue their roadmap out of lockdown on February 22, the FTSE and pound swung positive on Friday afternoon.

“After spending most of February ranging between 6,500 and 6,550, the FTSE found itself slipping below the bottom end of that bracket earlier in the session, only for a reversal of fortunes to push it beyond 6,570.”

The pound also edged higher later in the day’s session, with sterling just a fraction off Wednesday’s 33-month peak against the dollar.

The pound increased by 0.31% versus the US dollar to 1.386 and was up 0.34% against the euro at 1.143.

After spending most of February ranging between 6,500 and 6,550, the FTSE found itself slipping below the bottom end of that bracket earlier in the session, only for a reversal of fortunes to push it beyond 6,570Connor Campbell, financial analyst at Spreadex

Elsewhere in Europe, equity markets were far more mixed with the Dax crawling back into the green after spending most of the day at a loss.

The German Dax was 0.02% higher and the French Cac moved 0.6% higher.

In the US, the Dow Jones dipped on a conservative session as a lack of immediate progress on Joe Biden’s stimulus plan kept traders quiet.

In the UK, housebuilders including Bellway, Taylor Wimpey and Berkeley made modest gains after the Government extended the deadline for the Help to Buy scheme until the end of May.

In company news, airliner Jet2 tumbled after it tapped its investors for a £422 million cash injection to bolster its finances.

The Leeds-based company issued 35.8 million placing shares and 593,561 subscription shares at 1,180 pence per share as flights remain cancelled until April.

It finished the day 94p lower at 1,204p.

Elsewhere, cruise operator Carnival slumped in value after it was hit by a downgrade from brokers at Berenberg.

It was 37.5p lower at 1,263p at the close of play on Friday.

Target Healthcare also nudged lower after the care home investment firm launched a £50 million equity raise to fund expansion plans. It moved 3.6p lower at 113p.

The price of oil moved up for the day after energy markets shook off early bearish sentiment follow OPEC cautions that demand will be impacted by the restrictions connected to the coronavirus.

The price of Brent crude oil increased by 2.11% to 62.43 dollars per barrel.

The biggest risers on the FTSE 100 were St James’s Place, up 46p at 1,225p, AstraZeneca, up 225p at 7,471p, DCC, up 174p at 5,882p, and Prudential, up 38p at 1,328p.

The biggest fallers on the FTSE 100 were Kingfisher, down 6.1p at 270.9p, SSE, down 27p at 1,422p, Tesco, down 3.9p at 240.6p, and Whitbread, down 38p at 3,207p.

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