MARKET REPORT: Footsie and pound rally as Britain bounces back

The FTSE 100 clocked up a fourth week of gains as the economic mood brightened.

On another upbeat day, the blue-chip index rose 0.4 per cent, or 28.53 points, to 7871.91 and the FTSE 250 gained 0.9 per cent, or 172.56 points, to 19242.69.

London’s top tier has spent all but one of the past 13 sessions in the black.

And with recession fears fading, the pound hit a ten-month high of $1.2546 before retreating.

Sterling has gained on the dollar for five weeks in a row in its best performance in more than two years. It represents a dramatic change in fortune since the autumn when the pound fell to around $1.03 after the Liz Truss-Kwasi Kwarteng mini-Budget.

The pound has benefited from the weakening of the dollar as investors bet interest rates in the US are at or close to their peak.

Hopes that the Federal Reserve is bringing its programme of aggressive rate hikes to an end have also boosted global stock markets. With major banking stocks on Wall Street on the rise, in London Standard Chartered added 4.4 per cent, or 27.4p, to 646p, HSBC rose 3 per cent, or 17p, to 584.3p and Barclays increased by 3.2 per cent, or 4.94p, to 157.88p.

HSBC warned the sale of its French retail bank could collapse due to soaring interest rates, increasing how much its buyer, My Money Group, needed to raise.

HSBC said it remains committed to the deal but the sale is now ‘less certain’.

William Hill owner 888 benefited after it unlocked a number of VIP accounts in the Middle East following an investigation into anti-money laundering processes.

The Gibraltar-based gambling firm said it has completed the internal probe and introduced ‘robust policies and procedures’ to take on new customers in the region. Shares shot up 20.9 per cent, or 12.9p, to 74.7p.

888 froze £50m worth of accounts in January after an internal review found best practices had not been followed in some areas, including anti-money laundering processes.

VIP accounts generate substantial turnover for gambling companies as high-rollers are encouraged to bet big sums.

There was mixed news for Hays after it hailed record quarterly fees but warned of a slowdown in permanent hires.

The recruitment firm reported a 5 per cent like-for-like increase in fees for the three months to March 31.

Its performance was driven by the temporary and contracting division, its largest business which makes up 59 per cent of group fees, which fared better than the permanent hiring arm.

Germany was the company’s best-performing division but earnings across the UK and Ireland, together with Australia and New Zealand, all slumped after a fall in permanent hires. Shares rose 1.2 per cent, or 1.4p, to 115.4p.

The owner of the UK’s largest hotel brand could be snapped up by a bidder with ‘deep pockets’, a City broker said.

Peel Hunt raised its rating on Whitbread, which is behind Premier Inn, from ‘add’ to ‘buy’ and hiked the target price from 2850p to 4000p.

The investment bank hailed the hotel operator’s post-pandemic recovery and said its strategy will ‘deliver value over time’. But this brings the ‘potential for a bidder, with deep pockets, to realise Whitbread’s real estate value more quickly’, it added. Shares rose 2.3 per cent, or 70p, to 3086p.

Cutting costs boosted online electrical retailer AO World. Profit for the year to March 31 was around the top end of the £37.5m to £45m range it gave at the end of February. This marked its third profit forecast upgrade this year. It also said revenues hit £1.13bn.

Shares soared 11.8 per cent, or 8p, to 75.65p yesterday.