Pound Sterling jumped sharply on Thursday, November 3, following the High Court ruling on Article 50, while the FTSE 100 dropped. At the close of London trade, the pound was up 1.1% at $1.2438, but the FTSE 100 fell 0.8% to 6,790.5 points.The pound leaped 1.1% against the euro to €1.1214.
The court ruling has “made triggering Brexit a lot trickier and has given sterling a massive shot in the arm”, said Neil Wilson at ETX Capital.
Sterling was also strengthened after the Bank of England predicted higher growth for this year and 2017. The Bank left interest rates on hold at 0.25% as expected, but also sharply raised its inflation forecast for next year.
Many traders hope that the court ruling will at the least delay the process of leaving the EU or reduce the government’s ability to push through a “hard Brexit” that would mean leaving the single market.
Downing Street said it was disappointed at the decision and would appeal, with the case expected to be heard by the Supreme Court before the end of the year.
“Even if it does go to a parliamentary vote, it is unlikely MPs will want to be seen as going against the referendum result by blocking the enacting of Article 50,” said Connor Campbell of Spreadex. “Nevertheless, the pound was due some good news, and it has certainly taken advantage of this brief glimmer of hope.”
Although the FTSE 100 ended lower, shares in some UK-focused companies closed higher, with the 6.5% rise for Royal Bank of Scotland making it the biggest riser. However, the stock was still down by more than a third this year.
