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BT leads FTSE lower over pension deficit fears
by Gavin Lumsden on Jun 16, 2014 at 15:01
Monday carried on where Friday left off with the pound rising further at the prospect of higher interest rates and the FTSE 100 extending its retreat over concerns about Iraq.
The pound breached $1.70 against the dollar in early trading, the first time it has done so in nearly five years although it later settled back, after comments by Bank of England deputy Charlie Bean.
Bean stoked speculation that the Bank’s monetary policy committee was moving towards an early interest rate rise after yesterday saying he was keen to start to ‘normalise’ UK interest rates soon and that he was optimistic about economic growth.
His comments follow the Mansion House speech by the Bank’s governor Mark Carney who on Thursday night said interest rates might rise sooner than the market expected.
Investors’ nervousness over the Islamic insurgency in Iraq was heightened by gunmen, reportedly linked to the Al Shabaab Islamist group, killing 48 people in Kenya who had gathered to watch the World Cup on television.
The FTSE 100 slipped 20 points or 0.3% to 6,758 as oil prices rose again with Brent crude up again lose to $113 a barrel.
Energy markets were also unsettled by Russia cutting off gas supplies to Ukraine in a dispute over unpaid bills that could disrupt supplies to Europe.
Meanwhile, BT (BT) was the biggest faller, down 2.5% to 384p after the Sunday Times claimed its pensions deficit had jumped 50% to about £6 billion in the latest triennial review of its company retirement scheme.
Smith & Nephew (SN) tumbled in early trading after Medtronic of the US scotched reports it was preparing a bid for the UK medical devices manufacturer by announcing a $43 billion bid for Dublin-based Covidien. The shares later recovered to trade a penny down at £10.70.
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