After a week marked by the inauguration of a new prime minister and the death of the queen, the London stock market rose.
The FTSE 100 index increased 1.2%, or 89.01 points, to 7351.07 and the FTSE 250 index increased 1.6%, or 309.74 points, to 19188.03 after the stock market announced normal trading operations.
As the powerful dollar paused its recent ascent, the value of the pound rose against the dollar as well. After reaching a 37-year low of $1.1406 on Wednesday, the British pound rebounded to a high of $1.1647 before retreating.
The stock and currency markets rallied at the end of a week that witnessed the death of Queen Elizabeth II and the installation of Liz Truss as the new prime minister.
As the nation and the world came to grips with the Queen’s passing, the Square Mile reportedly experienced a gloomy atmosphere.
Phillip Wale, chief executive officer of stockbroker WH Ireland, stated, ‘Everyone on the trading floor feels numb. We have had client meetings, but to be completely honest, nobody has discussed stocks and shares. The day is gloomy, yet business continues. The stock market and the pound have demonstrated a degree of resiliency.
Director of wealth management at Oberon Investments Adam Pollock remarked, “A very sad day.” In the spirit of the Royal Family, the performance must continue.
The London Stock Exchange has said that it will remain open during the official time of mourning, but will close on the day of the funeral, which is anticipated to be a public holiday.
The Bank of England has postponed next week’s key meeting of the Monetary Policy Committee, which determines interest rates, while the stock market remains open.
It was generally anticipated that the panel, chaired by governor Andrew Bailey, would announce another increase in interest rates on Thursday as it intensifies its fight against sky-high inflation. The Bank was expected to boost interest rates by an additional 0.5 percentage points, bringing them from 1.75 percent to 2.25 percent, although a 0.75 percentage point hike was also a possibility.
In light of the current time of national mourning in the United Kingdom, this month’s MPC meeting has been postponed by one week, the Bank of England announced.
Despite the upheaval, the pound’s value against the dollar rebounded after falling to its lowest level since 1985 earlier in the week. Bill Gross, the co-founder of Pacific Investment Management Company and a renowned investor, is confident that the pound will recover in the coming months.
He stated, “Continued substantial trade deficits and a cap on the Fed’s capacity to raise interest rates to projected levels due to a future recession will limit the pound’s ability to depreciate further and will likely result in future gains against the dollar.”
