Europe

Pound soars and FTSE up as markets rally to Rishi Sunak premiership

Rishi Sunak makes first statement as Prime Minister

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The pound has risen to its highest level against the dollar in weeks after Rishi Sunak’s appointment as Prime Minister. Sterling rose to $1.16 this morning while the FTSE 250 rose 0.2 percent.

On taking office, Mr Sunak pledged to lead the UK out of an economic crisis and stuck with Jeremy Hunt as chancellor.

Joseph Capurso, a strategist at Commonwealth Bank of Australia, wrote in a client note: “With Jeremy Hunt confirmed reappointed as Chancellor, we judge the political discount to GBP is fading.

“However, GBP retains a number of headwinds such as a looming recession and a growing current account deficit.”

Mr Sunak said he would try to fix the mess left by Liz Truss, restore trust in British politics and tackle a “profound economic crisis” in his first speech since becoming PM on Tuesday (October 25).

The pound had rallied last Thursday as then Prime Minister Liz Truss announced her resignation.

At that time, sterling was up 0.5 percent at $1.1278, having headed higher ahead of the news. 

While the FTSE 250 rose slightly this morning, the FTSE 100 index was down 0.1 percent by 7.47am today (October 26).

Shares of WPP dropped 3.6 percent to the bottom of the FTSE 100 after the group tempered its expectations for operating margin growth, and Reckitt Benckiser slumped 3.2 percent despite providing a positive sales outlook.

Shares of Standard Chartered and Barclays slipped even though both lenders reported higher quarterly profit.

AstraZeneca Plc jumped 2.2 percent after the British drugmaker said its experimental drug Capivasertib met the main goals of a breast cancer study.

READ ABOUT GAS PRICES FALLING

The dollar index, which measures the greenback against six peers, including sterling, the euro and the yen, was little changed at 111.01, near the previous session’s trough of 110.75, the lowest level since October 5.

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