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FTSE nudges higher

A slight decline in the pound is working in favour of UK exporters this morning but concerns over Brexit are capping a FTSE rally. Among the risers, Pearson’s shares spiked after the company said it would sell its remaining stake in Penguin Random House for £530m while also announcing that the company’s CEO will step down.

Lingering concerns over the gradual weakening of the UK economy – visible in the latest consumer price data out Wednesday – and concerns over Britain’s trade deals after Brexit are holding back house builders and travel and fashion firms.

In Europe, the final decision on the massive Ford-Peugeot tie-up, estimated at $50 billion, is lifting the shares in the two car makers. The merger still has to receive regulatory approval and could run into resistance from Italian and French labour unions over potential job losses.

BoE: Inflation and the next governor

The pound has cooled slightly ahead of the Bank of England’s next rate meeting Thursday but the number of governors calling for a small cut to boost the country’s economy could become louder given that the labour market is cooling and as the country’s inflation rate remains below the Bank’s target of 2%. A decision on who will succeed Mark Carney is also expected shortly with the three front runners including Minouche Shafik, director of the London School of Economics; Andrew Bailey, Financial Conduct Authority chief executive; and Kevin Warsh, a former top official at the US Federal Reserve.

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