By Carla Mozee, MarketWatch
The pound has stepped higher on expectations the Bank of England will raise interest rates again this year, possibly in May. It’s also benefited from quarterly losses for the dollar /zigman2/quotes/210598269/delayed DXY +0.09% .
Sterling is still below the $1.50-area it traded at just before Britain voted to leave the European Union in a June 2016 referendum. Thursday marked one year to go before Brexit, although Britain and the EU last week agreed to a two-year transition deal.
The U.K.’s gross domestic product in the fourth quarter of 2017 was unchanged by the Office for National Statistics. Quarter-over-quarter GDP growth was confirmed at 0.4%, meeting expectations, and year-over-year growth remained at 1.4%.
New borrowing by U.K. households rose in February to its highest level since September as Britons borrowed an additional £5.4 billion ($7.6 billion) during the month, driven by new mortgage borrowing, according to Bank of England data.
GKN PLC shares rallied 9.5% to £4.63 each after more than 50% of the engineering group’s shareholders accepted an £8.1 billion buyout offer from turnaround specialist Melrose Industries PLC /zigman2/quotes/210306391/delayed UK:MRO -1.45% . The deal comes after three months of arguing between the companies and intervention by the British Government.
Compass Group PLC /zigman2/quotes/200043088/delayed UK:CPG -0.63% shares fell 2% after French food services rival Sodexo /zigman2/quotes/206443022/delayed FR:SW +1.61% cut its fiscal 2018 financial outlook after a disappointing quarter. Sodexo shares sank 15.7% in Paris trade.
Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC -0.47% closed up 0.2% after the U.S. Justice Department said the London-based lender agreed to pay $2 billion in civil penalties to resolve fraud claims stemming from the sale of residential mortgage-backed securities, or RMBS, between 2005 and 2007.
Off the main benchmark, NEX Group PLC shares added 0.9% after the London-based financial-technology company agreed to a takeover by CME Group Inc. /zigman2/quotes/210449693/composite CME -0.24% in a deal worth $5.4 billion. NEX shares jumped 9.8% on Wednesday on news of a pending deal.
Apparel and accessories retailer Ted Baker PLC /zigman2/quotes/209654507/delayed UK:TED -1.09% fell 4.4% on the FTSE 250 after a ratings downgrade to hold from buy at Jefferies.
“[G]iven the near-term unseasonal weather in the U.S. [and] Europe and management’s cautious guidance, we believe the historical sales momentum underpinning the equity story will prove more elusive in the near term,” said analyst Niraj Amin in a note.