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Pound tumbles further over intensifying economic fears

·3-min read

The pound continued its recent freefall amid continued worries over the UK’s economic outlook.

Equity traders were unable to cheer the weakness in the currency as shaky economic figures from China and the prospect of hefty rate rises across global economies kept the largest global markets firmly in the red.

Chris Beauchamp, chief market analyst at IG, said: “The runaway train of losses has rattled further down the track today, as the gloom among investors deepens.

“September has a mixed track record at best in the past 20 years, but this could be one of the worst months of the year so far if today is any guide.

“Investor pessimism has returned with a vengeance over the past week, and fears of a recession across the globe, and not just in Europe, means that a return to, and drop below, the June lows now seems likely for a host of markets.”

In London, the FTSE 250 closed in on almost two-year lows while the FTSE 100 slipped to its lowest for six weeks.

London’s top index ended the day down 135.65 points, or 1.86%, at 7,148.5.

The pound was down 0.63% against the dollar at 1.154 but was 0.38% higher against the euro at 1.159 at the close.

Elsewhere in Europe, the Dax fell to its lowest levels since mid-July after sentiment was impacted by weak PMI data from China.

The German Dax declined 1.6% by the end of the session and the French Cac finished 1.48% lower.

On Wall Street, the main markets opened sharply lower as lower-than-expected jobless claims data only added fuel to concerns it will embolden plans by central banks to hike interest rates.

In company news, Dettol maker Reckitt Benckiser saw shares stumble on Thursday after it said that chief executive Laxman Narasimhan will step down at the end of the month.

The consumer group said Mr Narasimhan will leave on September 30 to return to the States for “personal and family reasons”.

Shares in the company declined by 344p to 6,304p as a result.

Elsewhere, holiday firm Jet2 was among the day’s rare risers as it said customers were continuing to pick package holidays despite pressure on budgets.

The Yorkshire-based business reported that it has a strong winter ahead, with forward bookings matching levels in the same period in 2019.

Shares closed up 11.6p at 866p.

Meanwhile, hotel group PPHE saw shares dip despite reporting a sharp increase in revenues following the return of holidaymakers, with losses also narrowing over the past half-year.

Shares declined by 15p to 1,390p as the company told shareholders that inflationary pressures, such as rising energy prices, would provide headwinds against profitability into next year.

The price of oil slipped for the third session in a row amid concerns over the lockdown in Chengdu and weak PMI figures.

Brent crude oil dropped by 3.01% to 92.76 US dollars per barrel when the London markets closed.

The biggest risers in the FTSE 100 were JD Sports, up 1.45p at 114.4p, Pearson, up 10.6p at 873.4p, Centrica, up 0.78p at 76.52p, Avast, up 6.2p at 713.2p, and SSE, up 12p at 1,664.5p.

The biggest fallers of the day were Entain, down 97.5p at 1,175.5p, Intermediate Capital Group, down 102.5p at 1,264.5p, Rolls-Royce, down 5.69p at 71.31p, 3i Group, down 82p at 1,133.5p, and Glencore, down 31.3p at 442p.