LONDON MARKETS: Pound Tumbles As British Factory Output Hits Seven-year Low Ahead Of Brexit Showdown


By Callum Keown

The pound tumbled following dismal British manufacturing data on Monday ahead of a crunch week for Brexit in Parliament.

The internationally-exposed FTSE 100 climbed 1.2% as the pound continued its downward spiral on no-deal Brexit fears and weak factory activity.

Domestic stocks were helped by Europe-wide positivity over U.S.-China trade tensions (link), with the FTSE 250 edging up 0.4%.

U.S. markets are closed on Monday for the Labor Day holiday.

What’s moving the markets?

Sterling continued its descent on Monday, sinking 0.5% to $1.2095 ahead of an important week of Brexit debate in Parliament.

MPs opposing British Prime Minister Boris Johnson will bring forward legislation blocking a no-deal Brexit later this week.

Conservative MPs voting against the government could be deselected and thrown out of the party (link), according to reports, ramping up the chances of the U.K. leaving the European Union without a withdrawal agreement in place.

British factory activity hit a seven-year low in August, also contributing to the pound’s fall.

The IHS Markit/CIPS U.K. Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.4 from 48 in July and business optimism fell to a record low.

The survey cited economic and political uncertainty, which hit domestic and export orders.

Neil Wilson, an analyst at, said: “The manufacturing PMI data is simply shocking.

“It’s wrong to pin this all on Brexit–as the report authors make clear, the global economic slowdown is the primary cause of the decline, albeit there was some impact from supply-chain reshoring as businesses seek to mitigate the impact of a no-deal Brexit.”

Which stocks are active?

AstraZeneca (AZN.LN) shares jumped 3.1% to all-time highs as the pharmaceutical company said Farxig, its type-2 diabetes drug, reduced the chances of cardiovascular death or worsening heart failure by 26% in a recent trial. Its cardiovascular drug Brilinta also reduced the risk of death and heart attack by 10%.

Gold miner Centamin climbed 1.1% as the company continued its reshuffle, adding two new executive directors to the board. The FTSE 250 company expects a stronger second half of the year from its Sukari gold mine in Egypt.


(END) Dow Jones Newswires

September 02, 2019 07:30 ET (11:30 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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