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Ftse 100 jumps to an 11-day high

written by Bella Palmer
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London’s top index jumped by around 1.4%, surpassing the 7,000 mark for the first time in several days

The FTSE 100 jumped to an 11-day high on Tuesday amid reports that Prime Minister Liz Truss was battling to hold onto her leadership position.

London’s top index jumped by around 1.4% at one point in the afternoon, surpassing the 7,000 mark for the first time in several days.

But it slipped back down later in the afternoon as it became clear that the Bank of England would not be delaying its plans to start selling UK government bonds again.

The FTSE 100 closed 16.5 points higher, or 0.24%, at 6,936.74.

It comes after the Bank’s two-week bond-buying programme, in which it scooped up £19.25 billion worth of gilts after UK pension schemes were scrambling to sell off assets.

The Bank dismissed reports that it would push back gilt sales to allow the markets time to recover, sending the pound lower and impacting gilt yields.

Sterling dived around 1.5% to 1.1258 US dollars at midday before clawing back some of its losses during the afternoon.

It was down 1.1% to 1.129 against the dollar and down 0.4% to 1.149 against the euro when markets closed.

The pound’s recent rebound has run into some resistance today on reports that the Bank of England could push back its timeline for selling off parts of its bond portfolio, said Michael Hewson, chief market analyst at CMC Markets UK.

This became inevitable in light of the recent volatility in the UK bond market, he said.

Some Bank of England officials have pushed back on this, saying that no such thing has been decided. However, to go forward now would be foolhardy in the extreme given that sentiment remains fragile, he said.

Nonetheless, the prospect of a hefty rate hike in November has not diminished, with the market pricing in the prospect of a possible 100 basis point move, he said.

Elsewhere in Europe, its top indices had held on to the gains made on Monday. The German Dax closed 0.92% higher and the French Cac was up 0.44%.

US markets were also in the green after a boost in early trading led by strong quarterly figures from top investment bank Goldman Sachs. The S&P 500 was up 0.64% and Dow Jones was up the same amount when European markets closed.

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