British shares climbed up Tuesday as investors looked for signs of progress in passing a proposed $1.9 trillion stimulus plan by the US administration that could help boost a quicker economic recovery this year.
The blue-chip FTSE 100 was up 0.1%, with consumer staples and financial stocks being the top performers. The mid-cap FTSE 250 index rose 0.1%.
While dollar languished near its lowest in a week, the pound jumped to a near 34-month high.
As part of his efforts to secure a recovery package known as the American Rescue Plan, US President Joe Biden is due to meet business leaders on Tuesday.
“A lot of big vaccine optimism is starting to become little tempered. So until the virus is on its way out, investors can only be looking at more stimulus and government support,” said Keith Temperton, a sales trader at Forte Securities.
The retail index fell 1.0% after surveys showed British consumer spending plunged at the fastest rate in seven months.
However, the online share of British grocery sales hit a record 16% in January, up from 8% in the same month last year, driven by increased demand during the country’s third COVID-19 lockdown, industry data showed.
The FTSE 100 has recovered nearly 33% from its March 2020 lows, led by a raft of stimulus, but a surge in infections and widespread lockdowns have slowed economic growth. The index has also lagged its U.S. and European peers, which are up 75% and 47%, respectively.
Britain said it would require passengers arriving from countries where worrying coronavirus variants were spreading to pay for 10 days of quarantine in hotels, while rule-breakers would face heavy fines or jail terms, under tighter restrictions from next week.
Homebuilder Bellway Plc rose 3.0% after it reported strong demand for new homes, as low lending rates and a temporary cut in stamp duty boosted activity in the sector.
Ocado Group fell 1.7% and was one of the top drags on the FTSE 100, even as the online grocer and technology group reported a 69% increase in 2019-20 core earnings.