FTSE Tumbles on Strong Pound

FTSE Tumbles on Strong Pound.

As predicted by us yesterday, with a huge increase in inflation, the UK stock market has taken a fall and we expect the same for the rest of the week.

High inflation piles pressure on the Bank of England to increase interest rates.

This will make the pound stronger, driving imported food and fuel prices down.

It will also reduce demand for UK stocks, particularly larger FTSE 100 companies that earn profits overseas and then bring even larger profits back into the UK with a weak pound.  A stronger pound means lower profits for big companies.

FTSE 100 had already fallen at one point by nearly 1%  today and closed today off 51 points down (around 0.6%).

Expect more pressure over the coming months as head into Brexit negotiations.