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British stocks rise amid drop in pound

by Paul

Stocks in London rose today after a dovish central bank announcement hit the pound, while markets elsewhere were pressured again by the latest controversies surrounding US President Donald Trump.

Equity markets in Frankfurt and Tokyo fell, while New York and Paris were essentially flat.

The gains in London’s FTSE 100 followed an upgrade to the UK economic growth forecast by the Bank of England, even as the central bank kept interest rates low and took a cautious stance on future increases.

“Domestic demand has been stronger than expected over the past few months,” the BoE noted.

“Nevertheless, continued moderation in pay growth and higher import prices following sterling’s depreciation are likely to mean materially weaker household real income growth over the coming few years.

“As a consequence, real consumer spending is likely to slow,” it added.

Analyst Omer Esiner of Commonwealth Foreign Exchange said some investors “may have been looking for a slightly more hawkish tone from the BOE.”

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