IMF raises growth forecast for all advanced economies except UK

The pound has made gains despite a flurry of gloomy economic reports, while advances among bank stocks helped the wider market push higher.

Unclaimed estates could land people with Edinburgh connections a fortune
Unclaimed estates could land people with Edinburgh connections a fortune

Official figures showing disappointing trade data, but a stronger-than-expected performance from the manufacturing sector, saw the pound make strong gains against the US dollar and hold firm against the euro.

Sterling lifted 0.6% to 1.32 US dollars and was flat at 1.12 euros.

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The FTSE 100 Index closed the session 30.4 points higher at 7538.3 thanks to increases among banking stocks after a broker upgrade citing hopes of a softer Brexit.

On Wall Street, the Dow Jones Industrial Average was around 30 points higher at the time of close in London, having earlier hit a fresh all time high.

In London, the focus was on a string of economic reports, with the Office for Budget Responsibility (OBR) and the International Monetary Fund (IMF) delivering the latest blows to the UK outlook.

The OBR warned it would have to “significantly” slash its forecasts for productivity growth, impacting the outlook for public finances and output.

This came as the IMF also offered little cheer with a report showing it raised growth forecasts for all advanced economies aside from the UK, after weaker-than-expected economic performance resulted in a downgrade earlier this year amid Brexit uncertainty.

And the latest data from the Office for National Statistics showed the UK’s trade deficit in goods hitting the highest level on record in August, dampening hopes that the weak pound is rebalancing the economy away from services towards exports.

But the upbeat manufacturing figures offered a little hope and reinforced expectations for the Bank of England to begin hiking interest rates as soon as November.

Among stocks, embattled BAE Systems was one of the FTSE 100 fallers after it announced plans to cut almost 2,000 jobs across military, maritime and intelligence services.

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Its shares fell 2p to 616.5p.

But banks were enjoying a better session, with Royal Bank of Scotland the biggest riser in the sector, up by 5.3p at 277.5p followed not far behind by HSBC with a gain of 7.8p at 763.4p.

Lloyds Banking Group and Barclays were also making gains, ahead 0.6p at 67.1p and 1.7p at 190p respectively.

Banks were boosted after Credit Suisse delivered an upgrade.

Elsewhere, Domino’s surged 9% higher - up 2p at 329.4p - after it shrugged off an “uncertain” consumer environment to post a recovery in UK third quarter sales.

Recruitment firm Robert Walters was also benefiting from a robust trading update as it upped its earnings outlook once again as UK hiring continues to shrug off Brexit fears.

Shares rose 54.5p to 600p.