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Sterling falls after Bank of England report | |
(about 5 hours later) | |
The pound fell after the Bank of England's latest forecasts gave few signs of an early interest rate rise. | |
The Bank upgraded its growth forecast for this year to 2%, and - as expected - kept interest rates on hold at 0.25%. | |
It said some of its rate-setters had "moved a little closer" to their limits of tolerating inflation overshooting the Bank's 2% target. | |
However, markets felt there was no real change to the Bank's stance, and the pound fell sharply. | |
Against the dollar, sterling fell by more than cent to $1.2549, while it dropped 1.3 euro cents, or 1.1%, against the euro to 1.621 euros. | |
The fall in the pound triggered a rise in the benchmark FTSE 100 share index, which was up 46.64 points at 7,154.29. | |
A weaker sterling is seen as beneficial to many multinational firms listed on the FTSE 100, as it means earnings overseas are worth more when converted back into pounds. | |
Among individual shares, Reckitt Benckiser rose 3.4% after the consumer goods group confirmed it had made a bid approach for US baby formula maker Mead Johnson. | |
Reckitt has made a $90-a-share cash offer for Mead Johnson, valuing it at $16.7bn. | |
Shares in Royal Dutch Shell were up by about 2.5% after the oil giant reported its latest results. Profits for 2016 fell to $3.5bn from $3.8bn. | |
However, Shell said cash inflow during the final quarter of last year had been $9bn, more than covering its dividend, and that it had been able to repay $4.5bn worth of debt. | However, Shell said cash inflow during the final quarter of last year had been $9bn, more than covering its dividend, and that it had been able to repay $4.5bn worth of debt. |
Vodafone shares fell 0.5% after the mobile phone giant said growth in full-year earnings was set to be at the low end of its range of 3% to 6%. | |
In the final three months of 2016, Vodafone said its UK revenues had fallen, citing tougher price competition in its business services division. | In the final three months of 2016, Vodafone said its UK revenues had fallen, citing tougher price competition in its business services division. |