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FTSE 100 reaches record close after pound slips on Brexit fears

(c) Sky News 2017: <a href="http://news.sky.com/story/ftse-100-reaches-record-close-after-pound-slips-on-brexit-fears-11077809">FTSE 100 reaches record close after pound slips on Brexit fears</a>
 

The FTSE 100 has closed at a record high thanks to a fall in the pound on jitters over the progress of Brexit talks.

London's leading share index finished Thursday's session 22.43 points, or 0.3%, higher at 7556.24.

The pound had fallen by as much as a cent against the US dollar during the day to nearly $1.31 after EU chief negotiator Michel Barnier warned of a "very disturbing" deadlock on the UK's divorce bill.

Sterling recovered later to sit only about half a cent lower by the close of the stock exchange - and later clawed back all of its losses before climbing close to $1.33.

That was after Reuters reported that a draft EU paper appeared to leave open the prospect of a rapid move to free trade talks in December if Britain improves its offer of withdrawal terms.

But the earlier weakness of the currency had boosted the share prices of UK-listed multinationals - because a weak pound increases the value of their foreign earnings when translated back into pounds.

The FTSE 100 reached its highest intraday level in June at 7598.99.

Its latest rally did not quite see it reach that level, though its closing value was the highest ever.

David Madden, market analyst at CMC Markets UK, said: "The bullish move was achieved for the wrong reasons, as the dip in the pound on the back of the stalled Brexit talks helped the British index."