Pound at 31-year low as FTSE 100 hits a near record high
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The pound has hit its lowest level against the dollar since 1985, helping the FTSE 100 surge to near record highs.
Sterling fell to its weakest mark against the US dollar for 31 years, sinking to $1.27.46, following the Prime Minister's confirmation of a timetable for triggering the Brexit process.
However, with a cheaper pound promising to boost earnings, the London share index soared.
The FTSE 100 has closed up 1.30% or 90.82 points at 7,074, just short of its record high of 7,104.
:: PM moves to allay 'hard Brexit' market fears
Its highest ever intraday level, in April 2015, was 7,123. However, in dollar terms, the FTSE's value remains well below its referendum result level.
The FTSE 100 consists largely of export-dominated multinationals which make the bulk of their sales in dollars.
A weaker pound is also good news for exporters, as their goods are more attractive to overseas buyers, but it will hurt holidaymakers picking up foreign currency.
Exporters on the mid-cap FTSE 250 helped it reach an all-time closing high of 18,342.
The nature of this week's sterling movement has been largely attributed to announcements at the Tory conference in Birmingham.
:: Pound's peril in different world to 1985
Investors fear a so-called 'hard Brexit' with the UK losing access to the European single market as part of
plans to clamp down on immigration.
Kathleen Brooks, research director at Forex.com and City Index, told Sky News :
"One of the key things that's weighing on the pound now is we've got low interest rates and the market expects interest rates to go even lower in the UK."
She (Munich: SOQ.MU - news) 's warning that we could see sterling fall even further against the dollar.
"We could see it down to potentially the $1.25 level, maybe even the $1.20 level by early next year."
Ms Brooks says the UK's new Chancellor, Philip Hammond did not help the outlook for the pound, when he suggested that George Osborne's fiscal rules will be abandoned and Government spending increased.
"This is designed to cushion some of the blow from the UK's departure from the European Union," she said.
"However, it is likely to weigh on the UK's already large budget deficit, which is another blow to the pound at the start of the new quarter."