FTSE rebounds, Sterling drops

FTSE 100 on track for a 2.7 % weekly gain

UK stocks climbed on Friday as the UK economy rebounded faster than expected, strengthening the chances of a rate hike next week.

After a 2% fall in December, data showed that gross domestic product (GDP) increased by 0.8% in January. That was the highest monthly expansion since June and exceeded the 0.2% rise expected by economists.

After a turbulent week, the FTSE 100 has found its footing, while the pound has fallen versus the dollar as investors assess the economic consequences of Russia’s invasion of Ukraine.

Energy and commodity stocks supported the London blue-chip index, which jumped 1% in early morning trading. This puts it on track for a 2.7 % weekly gain, while the FTSE 250 index was on course for its best weekly performance in more than a year.

Against a stronger dollar, the British Pound fell to $1.3052, its lowest level since November 2020. Investors continue to flock to the dollar as a safe haven, but rising inflation data has bolstered prospects of a Fed rate hike.

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Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.