LONDON: UK stocks closed higher on Friday as investors digested corporate updates as well as Federal Reserve Chair Kevin Warsh’s comments at the Jackson Hole symposium that boosted the chances of a US interest rate hike next month.
The blue-chip FTSE 100 rose 0.3 percent to 10,824.26 points, ending the week nearly flat. The midcap FTSE 250 added 0.2 percent to 24,938.79 points and recorded a weekly gain of nearly 1 percent.
The US central bank will “have work to do” if policymakers don’t get the confidence they need that inflation is heading down to 2 percent, Warsh said, which the markets interpreted as an acknowledgement interest rate hikes may be needed to ease price pressures.
US stocks were mixed, while the dollar gained ground as traders anticipated a nearly 60 percent chance that the US central bank will raise interest rates in September, compared with 35 percent a day ago, according to CME Group’s FedWatch tool.
Still, investors have been paring back expectations of a rate hike from the Bank of England this year.
Oil prices dipped on Friday, with Brent crude trading around USD89 a barrel as traders continued to monitor a deadlock in US-Iran diplomacy.
British businesses turned the most confident since March this month, bolstered by a rosier view of the economy, according to a survey that echoes other signs of an improving outlook.
Among single stocks, Goodwin climbed 1.4 percent after the mechanical engineering company reported full-year trading profit of £77.50 million (USD105.3 million), more than double from a year ago.
Recruiter Hays climbed about 5.1 percent after Panmure Liberum upgraded the stock to “buy” from “hold”.