Ftse rallies as political announcements help to dispel uncertainty

London’s top-flight index rallied towards the closing bell as it was confirmed that Theresa May would be in post as prime minister by tomorrow after rival candidate Andrea Leadsom dropped out of the race.

The Ftse 100 Index soared 92.2 points to 6,682.9 — hitting an 11-month high — amid a flurry of political announcements during the session, which helped to demystify some of the uncertainty dogging the financial markets since Britain voted to leave the EU.

The rise saw the top tier technically enter a bull market after closing more than 20% higher than its low of 5,537 on February 11.

The Ftse 250 Index — deemed a better barometer for the health of the UK economy — closed up 3.27% to 16,706.4 after David Cameron said he would make way for May by announcing his resignation to the Queen tomorrow afternoon.

The confirmation that Leadsom had pulled out of the contest also handed a boost to sterling, which briefly touched the 1.30 US dollar mark, before paring back gains to 1.299 US dollars.

The pound stepped up 0.3% against the euro to 1.176.

The London market also pushed higher amid the increasing likelihood of an interest rate cut and a strong performance from mining stocks.

Anglo American was the biggest riser, up more than 8% or 63.9p to 808.9p, as the low value of the pound continues to strengthen firms who sell their products in dollars.

Bank governor Mark Carney has already signalled that policymakers on the Monetary Policy Committee (MPC) would vote to slash rates over the summer, suggesting a cut in July or August.

Economists at Hargreaves Lansdown said it was “now probable” that rates will be cut at the MPC meeting this Thursday, with financial markets pricing in a reduction from 0.5% to 0.25%.


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