Sterling rose and the FTSE 100 fell after the UK government lost a landmark case in the High Court on Thursday.

Judges in the High Court ruled that Prime Minister Theresa May could not trigger Article 50 without approval from parliament. Consequently, sterling gained significantly against other currencies, hitting a four week high later in the day as the Bank of England announced that interest rates would remain at 0.25 percent.

The FTSE 100 fell on the news, currently down 0.8 percent on the day. Mid caps rose however, outstripping the FTSE 100 by the greatest margin since April 2009. The FTSE’s international exposure tends to mean that as sterling strengthens, shares fall. Mid caps focus largely on the UK, meaning they benefitted from a stronger pound.

Kathleen Brooks, Head of Research at City Index, said in a note:

03/11/2016