Pound jumps in wake of Brexit ruling

Sterling notes Image copyright Getty Images

Sterling has risen sharply following the High Court ruling on Article 50, while the FTSE 100 has fallen back.

The court ruling has "made triggering Brexit a lot trickier and has given sterling a massive shot in the arm", said Neil Wilson at ETX Capital.

At the close of London trade, the pound was up 1.1% at $1.2438, but the FTSE 100 fell 0.8% to 6,790.5 points.

Sterling was also bolstered after the Bank of England predicted higher growth for this year and 2017.

The Bank left interest rates on hold at 0.25% as expected, but also sharply raised its inflation forecast for next year.

The pound climbed 1.1% against the euro to €1.1214.

Many traders hope that the court ruling will at the least delay the process of leaving the EU or reduce the government's ability to push through a "hard Brexit" that would mean leaving the single market.

Downing Street said it was disappointed at the decision and would appeal, with the case expected to be heard by the Supreme Court before the end of the year.

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"Even if it does go to a parliamentary vote, it is unlikely MPs will want to be seen as going against the referendum result by blocking the enacting of Article 50," said Connor Campbell of Spreadex. "Nevertheless, the pound was due some good news, and it has certainly taken advantage of this brief glimmer of hope."

Kathleen Brooks at City Index said: "If it looks like there is a chance that Article 50 may not be triggered, then we could see a large turnaround for the pound."

Although the FTSE 100 ended lower, shares in some UK-focused companies closed higher, with the 6.5% rise for Royal Bank of Scotland making it the biggest riser. However, the stock was still down by more than a third this year.

British Land rose almost 3.8%, while both Marks & Spencer and easyJet gained more than 3%.

Shares in Morrisons rose 1.1% after the UK's fourth-largest supermarket reported a 1.6% increase in underlying sales in the third quarter - its fourth consecutive quarter of growth.

The biggest FTSE fallers were precious metals miners and companies whose profits are largely made abroad, following the rise in sterling.

Randgold Resources was the worst performer, shedding 6.1%, with fellow miner Fresnillo off 4.1%.

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