Pound falls as Brexit saga takes another turn

Sterling was on the slide on Wednesday as Theresa May requested a three-month delay to Brexit, plunging Britain deeper into crisis.

The pound shed 0.5% versus the US dollar to 1.319 at the London market close.

Against the euro, sterling was also down 0.5% at 1.162.

It came after another day of high political drama, which saw the Prime Minister pen a letter to European Council president Donald Tusk, asking to postpone the UK’s departure from the European Union from March 29 to June 30.

Mr Tusk has said in response a “short extension” to Article 50 should be possible “conditional” upon a positive vote in Parliament for Mrs May’s twice rejected deal.

Connor Campbell, financial analyst at SpreadEx, said: “Sentiment further soured on Wednesday, sterling dealt a blow as Theresa May opted to ask the EU for a brief, three-month Brexit delay over a longer extension.

“That the EU would then have to unanimously approve the request, something that isn’t a guarantee, especially with France demanding Theresa May prove she can pass her twice-rejected deal, further complicates matters.”

The FTSE 100 also ended the day in the red, falling 32.99 points, or 0.45%, to 7,291.01.

In stocks, B&Q owner Kingfisher sank to the bottom of the FTSE 100 after the retailer reported a plunge in pre-tax profits and kicked off the search for a new chief executive.

Kingfisher said it had begun succession planning for under-fire boss Veronique Laury, but has not yet set a date for her departure and confirmed she will remain in post until a successor has been appointed.

Ms Laury has faced increasing pressure after the group has suffered declining profits and sales despite her efforts under a five-year transformation plan launched in 2016.

It came as Kingfisher reported a 52.8% drop in pre-tax profits to £322 million for the year to January 31.

Shares ended the day down 15.6p at 229.7p.

On the FTSE 250, shares in Inmarsat soared after the satellite communications group said it was considering a 3.3 billion US dollar (£2.5 billion) takeover bid from an investor group led by Apax and Warburg Pincus.

Inmarsat said the consortium tabled the cash proposal offering 7.21 US dollars (545p) a share on January 31, around 24% higher than Tuesday’s closing price of 437.8p a share and 47% higher than when the approach was made.

Inmarsat said the proposed offer remains “under discussion”, while shares rocketed 57.5p to 495.3p.

At the other end of the index, Kier Group’s stock plummeted after the embattled construction firm reported a first half loss as it prepares for the arrival of a new boss to lead a turnaround.

The company, which has contracts with Crossrail and Highways England among others, posted a pre-tax loss of £35.5 million for the six months to December 31, compared with a profit of £34.3 million the previous year.

Shares close down 54.6p, or 11.3%, at 429.4p.

In Europe, Germany’s DAX was down 1.57% and France’s CAC fell 0.57%.

A barrel of Brent crude was changing hands for 68 US dollars, a rise of 0.7%.

The biggest risers on the FTSE 100 were DCC up 110p at 6,675p, GlaxoSmithKline up 21.4p at 1,524.6p, Smurfit Kappa up 32p at 2,320p and Just Eat up 9p at 754.2p.

The biggest fallers on the FTSE 100 were Kingfisher down 15.6p at 229.7p, Persimmon down 93p at 2,212p, Taylor Wimpey down 6.4p at 178.6p and Berkeley Group down 127p at 3,838p.