Business

FTSE 100 back above 7,000 as pound slides

Trader watching monitor Image copyright AFP

London's main share index ended higher as the pound continued to slide on the foreign exchanges.

At the close of trade, the FTSE 100 index was up 44.43 points, or 0.63%, at 7,044.39.

In Asian trade, the pound had sunk 6% against the dollar in a matter of minutes to $1.1841, before recovering.

It is not clear what triggered the flash crash, with some blaming automated trading systems reacting to a news report.

Sterling remained under pressure, and was still down 1.5%, against the dollar at $1.2428.

The pound has been sliding all week, with traders nervous about how the UK's talks with the EU over leaving the bloc will progress.

Last Sunday, Prime Minister Theresa May said she would trigger Article 50, the clause needed to start the exit process, by the end of March 2017.

A fall in the pound is often seen as beneficial to the FTSE 100 as many of the companies in the index generate most of their revenues abroad. A weaker pound means overseas revenues are worth more when they are converted back into sterling.

Mining companies were among the biggest gainers in the FTSE 100 on Friday. Shares in Glencore rose 4.2%, while Randgold Resources added 2.7%.

Shares in housebuilders were coming under pressure, however, with Barratt Developments down 5% and Taylor Wimpey 3.7% lower.

In the FTSE 250, shares in William Hill and Ladbrokes were both lower after a report in the Times said gambling companies could be banned from advertising on TV during the day.