Pound jumps to a two-year high despite tension over Brexit talks

Sterling jumped to a two-year high as currency traders held out hope for a deal with the EU as time ticked away for an agreement to be struck.

Despite the strong pound, the London markets closed higher as they saw a boost by strong energy stocks.

The pound increased by 0.25% versus the US dollar at 1.348 and was up 0.27% against the euro at 1.110.

Meanwhile, the FTSE 100 closed 59.96 points higher at 6,550.23 at the end of trading on Friday.

Connor Campbell, financial analyst at Spreadex, said: “The FTSE was the day’s biggest winner.

“The UK index struck a nine-month peak of 6,650 following reports that OPEC – and, importantly, Russia and Saudi Arabia – have struck an oil output agreement.

“Though Brent Crude only added 1.5%, BP surged 3.9%, with Shell not far behind at 3.4%, providing the fuel for the FTSE’s recent peak.

“It also allowed the UK index to climb despite the pound’s own gains.”

Elsewhere in Europe, the other major indices were far more muted than FTSE with cautious sentiment among traders dragging the Dax lower again.

The German Dax was 0.21% lower while the French Cac moved 0.62% higher.

Across the Atlantic, the Dow Jones and S&P made gains despite a mixed US jobs report.

The S&P hit yet another intraday record high amid speculation that the US economy may still need further financial stimulus.

In company news, Primark owner Associated British Foods (ABF) closed in the green despite saying that the pandemic hit sales to the tune of £430 million – higher than previously expected.

It told investors it has recovered some of the costs, with overheads falling 25% during the autumn lockdowns and early signs that reopened stores are seeing strong sales.

Shares in the consumer group finished 57p higher at 2,360p.

Energy supplier SSE made gains after it lifted its profit targets on the back of sealing a deal to sell its 10% stake in the world’s biggest wind farm project.

It closed 25.5p higher at 1,386.5p after it confirmed the £202.5 million sale of its share of the Dogger Bank Wind Farm off the East Yorkshire coast to Italian energy giant Eni.

Cineworld sank on Friday after investors digested Warner Bros’s decision to release all of its 2021 releases – including blockbusters such as Dune, Matrix 4 and The Suicide Squad – on its HBO Max streaming service at the same time as in cinemas.

Shares in the chain closed 10.94p lower at 62.02p as Cineworld responded, saying cinemas are “the best place to watch a movie”.

Elsewhere, housebuilder Berkeley closed 89p lower at 4,764p after it revealed a 17% slump in pre-tax profits for the past half-year.

The price of oil was higher after OPEC confirmed that its output agreement will continue its fairly tough production cuts in place.

The price of a barrel of Brent crude oil increased by 1.53% to 49.17 US dollars.

The biggest risers on the FTSE 100 were BP, up 10.45p at 276.95p; Flutter, up 500p at 14,800p; Royal Dutch Shell A, up 46p at 1,402.4p; and Croda, up 200p at 6,140p.

The biggest fallers on the FTSE 100 were Kingfisher, down 13.7p at 268.8p; GVC Holdings, down 42p at 1,015.5p; Pennon Group, 35.6p and 959.4p; and Taylor Wimpey, down 5.85p at 161.1p.