Sterling dropped to a two-month low in early trading as the market reacted to Prime Minister Theresa May’s talk of a ‘hard’ Brexit.
The pound fell to $1.21, its lowest level since the end of October, following May’s interview with Sky News at the weekend during which she said Britain could not retain “bits of EU membership”.
The FTSE 100 was up 0.27 per cent at 7,229, supported by the weaker pound and strong trading in the US at the end of last week.
Spreadex’s Connor Campbell told Sharecast: “The main driver of the index’s growth seemed to be the latest plunge from the pound, which dropped by 0.8 per cent against both the dollar and the euro following Theresa May’s Sky News interview at the weekend. The Prime Minister’s comments were read as falling decidedly on the ‘hard’ end of the Brexit spectrum, with ‘control of [the UK’s] borders’ likely to be prioritised over continued access to the single market.
“This left sterling at a rough two-month low against both the dollar and the euro, something that in turn spurred the FTSE on by another 30 points. That means the UK index is hovering around the 7230 mark, around 10 points shy of the intraday peak it struck soon after the bell.”