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Pound boosted by services data

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The pound continued to strengthen on Friday, boosted by higher-than-expected services data.The UK services sector, which accounts for most of the UK economy, grew by its fastest rate in six months in October.Sterling rose against the dollar and euro, adding 0.3% to $1.30950 and 0.4% to €1.12410 respectively, partially reversing Thursday’s sharp falls.In contrast, the benchmark FTSE 100 share was flat by midday at 7,556.14, with shares hit by the pound’s rise.The index often falls when sterling rises, as the stronger currency decreases the value of companies’ overseas earnings when they are brought back to the UK and converted into pounds. The pound had fallen to a near five-month low against the dollar on Thursday following the Bank of England’s first interest rate hike in ten years.The Bank of England had reiterated that it would take a “very gradual” approach to raising interest rates further.’One-and-done'”A lot of speculation has been put to bed by the tone of the BoE yesterday.”The signals that we got was that it’s probably a ‘one-and-done’,” said Jane Foley, senior currency strategist at Rabobank.The top winner on the FTSE 100 was private healthcare provider NMC Health. Its shares rose almost 4% following an upgrade from Deutsche Bank.Airline shares were some of the biggest fallers with EasyJet losing 2% and British Airways owner International Consolidated Airlines Group dropping 1.3%.The falls follow a 9% drop in Air France-KLM shares, which analysts linked to the airline’s unclear guidance on costs next year.
Source: BBC News

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