Pound jumps on renewed hopes that no-deal Brexit could be halted

The pound edged higher on Tuesday as Jeremy Corbyn agreed to back a group of MPs in their attempts to halt a no-deal Brexit.

Sterling was 0.6% higher on the euro at 1.107, and jumped 0.5% versus the US dollar to 1.228.

It came after the Labour leader agreed to put a vote of no confidence in Boris Johnson on the back burner while cross-party efforts to stop the UK crashing out of the EU without a deal are prioritised.

The currency has proved to be sensitive to Brexit-related news in recent months, with standard economic news taking on secondary importance.

David Madden, market analyst at CMC Markets UK, said the pound was lifted on hopes that the MPs would be able to prevent a no-deal exit.

“While this may seem a plausible possibility, it ignores the fact that to prevent the UK leaving the EU without a deal MPs still only have one plausible option and that is to revoke article 50,” he said.

“Either that or they have to hope the EU is open to extending article 50, assuming that they get asked to do so. Nonetheless the pound has continued to gain ground and is the best performing G10 currency over the course of the last five days.”

The pound’s rise held back top shares in London, which were flat while their European peers made gains.

The FTSE 100, which benefits from a weaker pound, was down 5.4 points, or 0.08%, to 7,089.58.

The German Dax climbed 0.62% and the French Cac was up 0.67%.

Oil prices were lower after a weekend of escalating tension between the US and China, but President Donald Trump said talks between the countries will begin “very shortly”, soothing some investor fears.

A barrel of Brent Crude Oil was trading at 58.65 US dollars, down 0.27%.

In London, distribution and outsourcing giant Bunzl said it was in talks with “a number of acquisition targets” as it looks to accelerate growth for the rest of 2019.

Shares closed 6p down at 2,027p.

Carpetright’s biggest shareholder bought the retailer’s debts and vowed to engage with the business to provide longer-term, stable funding.

Shares were up 1.55p to 15.05p as Meditor’s moved to control Carpetright’s revolving credit facility of £40.7 million, instead of previous lenders NatWest and AIB.

Renold, a manufacturer of industrial chains, said it had completed an investigation into misreporting of its accounts and found that the issue was confined to its Gears unit.

Shares were up 0.85p after the company confirmed the investigation had found net assets at March 31 had been overstated by £2.5 million, while adjusted operating profit was off by £1 million.

The biggest risers on the FTSE 100 were NMC Health up 141p to 2,298p, Standard Life Aberdeen up 10p to 250.7p, British Land up 20.4p to 517.2p, and Land Securities Group up 24.8p to 784.6p.

The biggest fallers were British American Tobacco down 129p to 2,832p, Just Eat down 16.2p to 756p, Ferguson down 100p to 5,884p, and Standard Chartered down 7.6p to 606.8.