His remarks boosted sterling and sent the blue chip index back to the day’s lows with big international companies such as drugmaker Shire and drinks firm Diageo — which benefit from a weaker pound — among the heaviest fallers. The mid- cap index which is more domestically focused, did slightly better, ending down 0.3%.
Fund platform Hargreaves Lansdown fell 2.3% following an industry report by the UK’s markets watchdog.
In a drive to improve funds’ transparency, the Financial Conduct Authority proposed a number of changes to the asset management industry, saying it supported the disclosure of a single, all-in fee. It also said it would launch a market study into investment platforms.
“Rather than having the management fee and then also trading commission as well and then other sorts of fees on top of that, I think the regulator would rather that wealth managers charged just one fixed percentage that encompassed everything, so consumers would know exactly what they were paying,” said Rachel Winter, senior investment manager at Killik & Co.
She said because performance reporting has been a big part of Europe’s upcoming Markets in Financial Instruments Directive regulation, wealth managers had already been looking at their fee structures and considering one fee.
A weaker oil price was also a drag on UK blue chips, with shares in majors Royal Dutch Shell and BP dropping 0.6% and 1%.
Shares in Bunzl, a provider of distribution and outsourcing services, bounced 1.5%. Bunzl issued an upbeat trading statement in which it said it saw a 7% rise in first-half revenue at constant currency, as well as a boost from recent acquisitions.
Outside of the large caps, results dragged down shares in Stagecoach, which slumped 6.2% after its full-year earnings missed expectations.
Stagecoach’s full-year pre-tax profit dropped 15.3% as economic conditions hit its domestic bus business. n Reuters