Pound drops against the dollar amid uncertainty over Theresa May’s leadership

The pound dipped again on Wednesday as Brexit tensions and questions around Theresa May’s leadership fuelled uncertainty.

Sterling was down 0.57% against the US dollar, trading at 1.290.

Connor Campbell at Spreadex said: For sterling, the issue is unsurprising. It appears that the currency has been spooked by Theresa May’s impending meeting with the 1922 Committee of Tory backbenchers, with whom the PM hardly has the best relationship with at the moment, even before the rather violent comments reported in the papers over the weekend.

“The outcome of that address may impact how the Brexit negotiations move forward – or don’t, as the troublesome case may be.”

But the pound held its own against the euro, as the latter took a knock from disappointing economic data. Sterling was trading almost flat on the common currency at 1.132 euros.

The weaker pound helped the FTSE 100 to inch back up following Tuesday’s losses, though the index still closed well below the 7,000 point mark at 6,962.98. This marked an increase of 7.77 points of 0.11%.

David Madden, market analyst at CMC Markets UK, said that the mood across Europe was still subdued.

“Trading ranges were relatively small today and the decline since lunch time suggests that investors are not overly confident in the bounce back,” he said.

“Fears have simmered but they still exist, and investors remain cautious.”

The French Cac finished 0.29% lower while the German Dax was down 0.73%.

On the London market, shares in Barclays were up 4.94p to 170.7p as it reported a rise in third-quarter profits.

The group posted a rise in pre-tax profits from £1.11 billion to £1.46 billion in the three months to September 30.

The figures were helped by the absence of misconduct charges which dragged down first-quarter results.

Meanwhile Stobart shares recovered from an initial drop earlier in the day after half-year accounts showed it had swung to a loss.

The firm, which owns Southend Airport, posted a £17.5 million loss in the first six months of the year, compared with a profit of £111.9 million in 2017.

But following a tumble to as little as 197p in morning trading, shares regained ground to close up 0.5p at 215.5p.

Shares in Patisserie Holdings, the troubled parent of Patisserie Valerie remained suspended on London’s junior market on Wednesday evening, although the company said a winding-up order issued against a subsidiary had been dismissed in court.

There was more bad news for the casual dining sector as Gourmet Burger Kitchen, which is owned by Johannesburg-listed Famous Brands, confirmed plans to close 17 sites under a company voluntary arrangement (CVA).

On the oil markets, prices rose as attention returned to impending sanctions on Iran.

A barrel of Brent crude was trading 0.8% higher at 76.76 US dollars.

The biggest risers on the FTSE 100 were BT Group up 9.75p to 250.2p, Wood Group up 25.2p to 706.8p, Ocado up 28.4p to 801.2p and Barclays up 4.94p to 170.7p.

The biggest fallers on the FTSE 100 were Fresnillo down 39.2p to 938p, Antofagasta down 29.4p to 727.2p, Smurfit Kappa down 98p to 2,424p and Micro Focus down 48.5p to 1,268p.