London Daily

Focus on the big picture.
Thursday, Jan 23, 2025

Pound Plummets to 14-Month Low Amid Concerns Over UK Borrowing Costs

FTSE 100 Index Rises Despite Weakness in Retail Stocks as Multinationals Benefit from Sterling Decline
In a tumultuous turn of events, the British pound fell to a 14-month low on Thursday, as investors expressed growing concern over the UK’s borrowing costs.

Despite the currency’s slide, the FTSE 100 index climbed to a four-week high, driven by gains in multinational companies that benefited from a weaker sterling.

By the end of the trading day, the pound had dropped 0.58% against the US dollar to $1.229 and 0.34% against the euro to €1.193.

The significant dip in sterling coincided with a drop in the yield on the UK’s 10-year government bonds, reaching lows not seen since the 2008 financial crisis.

Government officials were quick to respond, reassuring investors that there was 'no need for emergency intervention,' which helped stabilize bond yields in the afternoon.

London’s financial markets found support from the international nature of many of the companies listed on the FTSE 100, despite challenges faced by UK-centric retail stocks.

Marks & Spencer, a stalwart of the British high street, experienced a decline as it flagged uncertainty due to rising costs, even as it reported robust Christmas trading figures.

Marks & Spencer’s shares fell by 8.4% to 345.3p.

Chris Beauchamp, Chief Market Analyst at IG, noted that 'the turmoil in gilts and sterling has understandably caught everyone’s attention, but the FTSE 100 has managed another strong day today.

Sterling weakness has proven to be a boon once again, and the international nature of many of the index’s members mean there is little read-across from the doom-laden trading in UK-focused assets.' The mining sector led gains on the FTSE 100, buoyed by a global rebound in commodity prices.

Contrastingly, major European indices showed more modest movements: France’s Cac 40 rose 0.51%, while Germany’s Dax dipped marginally by 0.05%.

Trading across the Atlantic was muted, with US stock markets closed for the funeral of former President Jimmy Carter.

In other corporate updates, Tesco’s shares slipped 0.5% to 368p despite the retail giant reporting a positive festive trading period with a 3.7% increase in like-for-like sales across the UK and Ireland.

Bakery chain Greggs also faced investor disappointment, with its shares plummeting 15.8% to 2,210p after it cautioned over a 'more challenging market backdrop' ahead.

Nevertheless, the day saw positive movements for some firms.

Banknote producer De La Rue saw an 8.3% increase in its share price to 111p following a £245 million takeover approach from a British financier.

Additionally, Brent crude oil prices recovered by 1.02% to $76.94 per barrel, as traders bought into the dip following a sharp previous session decline.

The notable risers on the FTSE 100 included Anglo American, Antofagasta, Fresnillo, Compass Group, and DS Smith, while the biggest fallers were Marks & Spencer, Entain, Sainsbury’s, Centrica, and WPP.
Newsletter

Related Articles

0:00
0:00
Close
Germany’s Democracy Under Strain: Political Labeling Sparks Free Speech Concerns
The Trump Era 2: A Time of Dramatic and Profound Change
BlackRock CEO Larry Fink Suggests Bitcoin Could Reach $700,000 with Increased Institutional Investment
Leaked Documents Reveal Google's Collaboration with Israeli Defense Forces During Gaza Conflict
Trump to Announce $500 Billion AI Infrastructure Investment
Dear President Donald Trump, I want to assure you that this fraud does NOT reflect the opinions of the majority of decent British citizens.
Olaf Scholz vs. Elon Musk: A Battle Over Common Sense, Which Scholz Appears to Be Missing
EU’s Overregulation Drives Innovation Collapse and Brain Drain
Five Billionaires on Track to Break One Trillion Dollar Wealth Barrier
TikTok Restored in the U.S. Following Trump inauguration
Bill Ackman Praises Social Media Platform X as 'The New Media'
Argentina Achieves Record Trade Surplus in 2024 Under President Milei
Italian Prime Minister Giorgia Meloni Proposes Rome as European Union Capital
France Urges EU to Act on Musk's Political Influence as Tensions Rise
Former Special Forces Blast Defense Ministry for Revealing Sensitive Details
Celebrity Responses to California Wildfires: Charity, Criticism, and Controversy
The Wildfires of Los Angeles: A Devastating Impact on Celebrities and California's Leadership
Tragic Loss: Teenager's Death Sparks Community Reflection in Bedford and London
UK Government Proposes Cap on Resale Ticket Prices to Combat Touts
Greenland's Future Caught in Diplomatic Crossfire Between Trump and Europe
EU Prepared to Lead Support for Ukraine Amid US Uncertainty, Says Estonian Prime Minister
Brompton E-Bike Component Diverted to UK Military Drone Production, Causes Delays
Romanian Gang Convicted of Human Trafficking and Exploitation in Dundee
Persistent Cold Snap Grips the UK: Severe Frost and Snow Disrupt Daily Life
Germany Faces Alarming Rise in Homelessness, New Report Shows
China’s Appetite for Salmon: A Game Changer in Global Seafood Markets
Russian Bots Allegedly Amplified NATO Critic Prior to Croatian Election, Researchers Reveal
Armenia Considers EU Membership Referendum Amid Strained Ties with Russia
French Finance Minister Explores Pension Reform Compromise to Secure Budget Agreement
Armenia Considers EU Referendum Amid Growing Rift with Russia
New Wildfire Ignites in Los Angeles as Region Battles Devastating Blazes
The Espionage Unraveled: A Russian Spy Network's Intricacies in the UK
U.S. Supreme Court Rejects Trump's Bid to Delay Sentencing in Hush Money Case
UK Financial Markets Remain Calm Amid Rising Government Borrowing Costs
Stellantis Achieves UK Electric Vehicle Sales Mandate Amid Factory Closure
TikTok Faces Potential Ban in the United States Amid Security Concerns
Pound Plummets to 14-Month Low Amid Concerns Over UK Borrowing Costs
Tensions Rise Over Planned Pro-Palestinian March in London
Bomb Scare in Central London: Abandoned Car Sparks Panic Near Regent Street
Police Seek Suspect in Antisemitic Incident at Liverpool Street Station
Regulatory Reprimand for London Charity Over Fundraising for Israeli Soldier
The Duchess of Sussex Mourns Devastating Loss of Beloved Rescue Dog
From Chairman to Controversial Politician: Rupert Lowe's Journeys in Business and Politics
Metropolitan Police Halts Pro-Palestine March Near BBC Due to Proximity to Synagogue
Inside Warwick Hospital: A Glimpse into the NHS's Battle Against Winter Pressures
Chappell Roan: A Synth-Pop Sensation Emerges as BBC Sound Of 2025 Winner
Search Intensifies for Missing Aberdeen Sisters Eliza and Henrietta Huszti
Pioneering Drug Consumption Room Opens in Glasgow
Ryanair Initiates Legal Action Against Disruptive Passenger in Landmark Case
Former Brexit Negotiator Oliver Robbins Appointed Top Civil Servant at UK Foreign Office
×