Sterling shrugs off no-deal fears to gain on dollar

Sterling shrugs off no-deal fears to gain on dollar

The pound shrugged off further Brexit developments to notch up a rise on Monday.

Sterling was trading up 0.5% at 1.315 US dollars at the end of the session, despite the International Monetary Fund warning that a no-deal scenario would inflict "substantial costs" on the UK economy.

Craig Erlam, senior market analyst at OANDA, said: "These pessimistic forecasts for the UK, both in the deal and no-deal Brexit scenarios, won't come as a surprise to anyone and will likely be heavily disputed by those Brexiteers who have constantly attempted to downplay the analysis of supposed experts.

"While the forecasts are gloomy, the expectations for a deal appear to be improving along with the more conciliatory comments in the media which is providing support to sterling."

British Prime Minister Theresa May also put her foot down in an earlier interview, saying MPs must agree to the Chequers Brexit proposals or leave the EU without a deal.

The pound was trading at 1.124 euros, up 0.1%.

The FTSE 100 ended the day in the red, dragged down by the stronger pound.

London's top flight closed down 1.94 points, or 0.03%, at 7.302.1.

Top-flight mining stocks lost ground on the back of fresh trade concerns when US President Donald Trump said tariffs had put the country in a "very strong bargaining position".

Glencore, Antofagasta and Anglo American slipped 1.2p, 7.6p and 1.4p respectively.

European markets were in a similarly pessimistic mood by the end of the day. The German Dax was down 0.23% and the French Cac 0.07% lower.

Sterling shrugs off no-deal fears to gain on dollar

Elsewhere on the London market, toy train maker Hornby announced a deal with film studios Warner Bros, sending shares soaring to finish the day 7.3p, or 23%, higher.

Updates from Dairy Crest and Finsbury Food Group showed two contrasting stories of cost inflation.

Cathedral City maker Dairy Crest said half-year profits are set to rise despite the higher price of butter. The news pushed shares up 8p.

But Finsbury Food Group profits tumbled 66% as the company contended with "unprecedented" inflation and the closure of its loss-making pastry factory. Shares slipped by 3p.

The biggest risers on the FTSE 100 were SSE up 38.5p to 1,122.5p, Evraz up 12p to 495.7p, Carnival up 111p to 4,815p, and Smurfit Kappa up 66p to 3,124p.

The biggest fallers were GVC Holdings down 36p to 995p, Scottish Mortgage Investment trust down 13.4p to 532p, Ashtead Group down54p to 2,340p, and Burberry down 44p to 2,109p.

PA

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