UK Shares Slip Amid Pound Surge; FTSE 100 Set for Weekly Gains
UK shares dropped on Friday, influenced by a rise in the British pound following a significant rate cut by the U.S. Federal Reserve. The FTSE 100 index fell 0.5% while the British retail sales beat expectations, lifting the pound to its highest level against the dollar since 2022.
On Friday, UK shares experienced a downturn as the British pound surged, despite the stock index being poised for weekly gains spurred by a rise in global risk sentiment following the U.S. Federal Reserve's substantial rate cut.
At 0715 GMT, the FTSE 100 saw a 0.5% decline due to a 0.4% increase in the British pound, which impacted export-oriented companies. The midcap index fell by 0.7%. August saw stronger-than-expected growth in British retail sales, which rose by 1%, outpacing forecasts of 0.4%. The data led to the pound reaching its highest level against the dollar since 2022, following a 50 basis point rate cut by the Federal Reserve, while the Bank of England maintained rates.
Stock declines on Friday were broad-based with all sector indexes either flat or down, notably a 4.5% drop in the personal goods index. Despite this, the FTSE 100 was set for a marginal weekly rise of about 0.2%, and the midcap index aimed for a 0.6% gain. However, UK stocks continue to trail behind their U.S. and euro zone counterparts for the year.
(With inputs from agencies.)
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