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Pound lifts and FTSE drifts as May outlines Brexit 'Plan B'

Climbing pound weighs on FTSE 100 after prime minister Theresa May outlines her next steps after MPs voted down her Brexit deal last week.

Pound lifts and FTSE drifts as May outlines Brexit 'Plan B'

Update: The pound has swung into gains against the dollar, weighing on the FTSE 100, after prime minister Theresa May outlined her next steps following the defeat of her Brexit deal by MPs last week.

Having traded lower in the run-up to May's statement, the pound swung into gains, hitting $1.29 and up 0.2% on the day.

That weighed on the FTSE 100, whose stocks rely on overseas markets for around three-quarters of their earnings.

The UK blue-chip index closed at 6,970, down from a session high of 6,987 but up two points on the day.

May said she would seek to extract further concessions from the European Union over the Northern Irish backstop.

'I will be talking further this week to colleagues - including in the DUP – to consider how we might meet our obligations to the people of Northern Ireland and Ireland in a way that can command the greatest possible support in the house,' she said.

'And I will then take the conclusions of those discussion back to the EU.'

May refused to rule out a no-deal Brexit, saying that, barring MPs voting for a deal, the only guaranteed way to avoid it would be to revoke Article 50.

'I believe this would go against the referendum result and I do not believe that is a course of action that we should take, or which this house should support,' she said.

(11:19) FTSE eyes 7,000 as pound dips

The FTSE 100 has edged closer to the 7,000 mark, boosted by a fall in the pound ahead of prime minister Theresa May's announcement of  her Brexit ‘Plan B’ in parliament later today.

The blue-chip index rose 17 points, or 0.2%, to 6,985 as the pound dipped a quarter of a cent to $1.285 against the dollar.

A weaker pound tends to support the FTSE 100 as its stocks rely on overseas markets for around three-quarters of their earnings.

Weakness in the British currency comes as May prepares to issue an alternative Brexit deal to break the deadlock in parliament. May has had three days to prepare her ‘Plan B’ for the UK’s departure from the EU, after her initial deal was rejected by MPs last week.

Markets have strengthened on the expectation that the UK would not leave the EU without a deal.

‘How she will manage to get parliamentary consensus is completely unclear given that her proposal was rejected by 402 out of 650 MPs last week and her subsequent attempt to find common ground with Labour didn’t yield any results,’ said Cityindex senior market analyst Fiona Cincotta.

‘EU politicians are not showing any more signs of willingness to cooperate than MPs and instead keep signalling that they are unwilling to agree to any more concessions for Britain.’

Easyjet (EZJ) was one of the biggest large-cap risers, with shares up 1.8% to £11.93, ahead of tomorrow's results.

Several analysts have upgraded their forecast on the airline, helping the shares to steady after rival Ryanair (RYA.I) issued a profit warning last week. The budget airline's contingency plans for no-deal Brexit are likely to be in focus.

On the FTSE 250, Just Eat (JE) fell 1.2% to 650p as Peter Plumb, chief executive of the takeaway ordering website, abruptly stepped down after just 16 months in the role.

Plumb had upgraded Just Eat’s technology, in a bid to keep pace with the likes of Deliveroo and Uber Eats, though increasing investment in the initiative caused earnings momentum to slow.

Just Eat also updated its earnings forecasts, with expected revenue of about £780 million in 2018 and underlying core earnings to range between £172 and £174 million, both ahead of analysts’ consensus forecasts.

Crude prices briefly rose to their highest point in 2019 so far after data showed refinery processing in China, the world’s second largest oil consumer, reaching a record high last year.

After climbing to $62.75 per barrel, Brent crude futures fell back to $62.49.

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