British stocks surge on US Senate deal on Jerome Powell

Written by By Daniel Gates, CNN London

The FTSE 100 jumped higher Thursday after US Senate Republicans reached a deal to approve the nomination of Jerome Powell to replace Federal Reserve chair Janet Yellen. Powell is seen as “a safe pair of hands” and “unlikely to radically alter the trajectory of monetary policy under President Donald Trump.”

The British index closed 3.02% higher at 7,047 points, helped by a strong banking sector. “Markets are rallying in anticipation of the Trump administration’s pick for the next Fed chair,” Gary Jenkins, director of Swordfish Research, said in a note to clients.

Barclays shares were up 1.78% on the back of news that former bank boss Bob Diamond had been appointed chairman of the firm’s asset management division, although this was generally overshadowed by the appointment of Penny Hughes as the new chief operating officer.

Investors were also looking to second-quarter GDP data, due Friday, to give insight into the health of the economy. Jenkins said that fears over a hawkish US central bank “have been dramatically overplayed.”

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