The FTSE languished in the red at the start of the trading week, beaten down by the strengthening pound and a slump at Primark owner AB Foods. As sterling rose to six-week highs on renewed Brexit optimism and stronger data, the multinationals on the FTSE sunk lower owing to the unfavourable exchange rate. There was no getting way from Brexit as the new week kicked off, hardly surprising given the flow of headlines across the weekend. However, today it was Boris Johnson’s softer approach to Brexit that grabbed traders’ attention. Bojo sounding keen to get a deal done when he was speaking with the Irish Prime Minister helped boost demand for the pound, as did signs that the UK economy was holding up even as Westminster was crumbling.
The UK's GDP increased by 0.3% in July, according to the Office for National Statistics, marking a return to growth after remaining flat in Q2 2019. The news the UK may be dodging a recession sent sterling to a six-week high at $1.2380 against the US dollar. Furthermore, London-based think tank the National Institute of Economic and Social Research now predicts that the UK economy will grow by 0.3% in Q3 2019, up from its previous forecast of 0.2%. It is thought Brexit stockpiling and the potential avoidance of a no-deal Brexit could help to buoy the economy.