UK stocks end the week higher amid political, economic turmoil

Reuters

Published Jul 08, 2022 08:31

Updated Jul 08, 2022 17:31

By Sruthi Shankar and Bansari Mayur Kamdar

(Reuters) -UK's FTSE 100 inched up on Friday boosted by energy and consumer staple stocks at the end of a week marked by political turmoil in Britain, soaring energy prices in Europe and hawkish comments from major central banks.

The blue-chip FTSE 100 rose 0.1% after falling as much as 0.8%, while the domestically oriented FTSE midcap index advanced 0.2%. Both the indexes still ended the week higher.

Oil majors BP (LON:BP) and Shell (LON:RDSa) gained 0.3% and 0.5%, respectively, boosting the commodity-heavy FTSE 100, as crude prices climbed in volatile trade on concerns of supply tighteness. [O/R]

Nevertheless, energy stocks were among the worst performers this week as crude prices declined on concerns over a potential recession-driven demand downturn.

The pound reversed course and edged higher after falling as much as 0.9% an unfavourable macroeconomic backdrop overshadowed concerns about politics after Prime Minister Boris Johnson announced his resignation.

The currency had hit a two-year low versus the dollar earlier this week amid the political chaos as well as worries about economic growth.

"We now see a partial policy vacuum at a time when the economy is stagnating and it's unlikely the Budget will be presented until late in Q4," Javier Corominas, director of global macro strategy at Oxford Economics said in a note.

"This will increase the focus on the Bank of England, further reducing the chances of a step up in the pace of rate hikes as it adopts a wait-and-see approach over weeks ahead."