London market rallies at end of a turbulent week that saw a Prime Minister take office and the death of the Queen
- The FTSE 100 index rose 1.2 per cent, or 89.01 points, to 7351.07
- FTSE 250 gained 1.6 per cent, or 309.74 points, to 19188.03
- Sterling was also on rise against dollar as mighty greenback took a breather
The London market rallied at the end of a turbulent week that saw a Prime Minister take office and the death of the Queen.
As the stock exchange said trading would carry on as normal, the FTSE 100 index rose 1.2 per cent, or 89.01 points, to 7351.07 and the FTSE 250 gained 1.6 per cent, or 309.74 points, to 19188.03.
Sterling was also on the rise against the dollar as the mighty greenback took a breather from its recent charge higher. Having hit a 37-year low of $1.1406 on Wednesday, the pound rose as high as $1.1647 before easing.
Rally: The FTSE 100 index rose 1.2 per cent, or 89.01 points, to 7351.07 and the FTSE 250 gained 1.6 per cent, or 309.74 points, to 19188.03
The twin rallies on stock and currency markets came at the end of a week that saw the death of Queen Elizabeth II days after Liz Truss succeed Boris Johnson as Prime Minister.
City figures said the mood in the Square Mile was subdued as the nation – and the world – came to terms with the Queen’s death.
Phillip Wale, chief executive at stock broker WH Ireland, said: ‘Everybody feels numb on the trading floor. We have had some client meetings but to be honest nobody has talked about stocks and shares. It is a sombre day but business goes on. The stock market and the pound has shown some resilience.’
Adam Pollock, director at wealth manager Oberon Investments, added: ‘A very sad day. In the spirit of the Royal Family the show must go on.’
The London Stock Exchange said it would stay open during the official period of mourning, but will close on the day of the funeral as it is expected to be a public holiday.
But while the stock market remains open, the Bank of England postponed next week’s crucial meeting of the Monetary Policy Committee that sets interest rates.
The panel – led by governor Andrew Bailey – was widely expected to announce another hike in interest rates on Thursday as it steps up its fight against sky-high inflation. The Bank was tipped to raise rates by another 0.5 percentage points – taking them from 1.75 per cent to 2.25 per cent – although an even bigger 0.75 percentage point increase was also seen as an option.
But the Bank said this month’s meeting of the MPC has been pushed back by a week ‘in light of the period of national mourning now being observed in the United Kingdom’.
Despite the turmoil, the pound regained ground against the dollar having plunged to its lowest level since 1985 earlier in the week. And respected investor Bill Gross, who co-founded Pacific Investment Management Co, is betting on sterling to recover over the coming months.
He said: ‘Continued large trade deficits and a ceiling on the Fed’s ability to raise rates to anticipated levels due to future recession will limit further depreciation of the pound and likely lead to future increases compared to the dollar.’