The pound has been sent to one-week highs on the back of strong UK manufacturing and industrial data that outstripped economist expectations.
It helped sterling rise 0.4% to 1.320 against the US dollar, where it hovered at its highest level since November 2 – and 0.3% versus the euro to 1.132.
The stronger pound weighed on the FTSE 100, which ended the day down 0.68% or 51.11 points at 7,432.99 points.
It came after official statistics showed Britain’s industrial sector has enjoyed its strongest run for nearly 25 years in September.
David Madden, a market analyst at CMC Markets UK, said: “GBP/USD was given a boost on the back of the robust British industrial and manufacturing output reports, which came in at 2.5% and 2.7% respectively.
“The growth rate was higher than economists’ expectations. The announcement spurred buying in sterling again as it has been trading within a tight range recently.
“The pound’s push higher since March is still in place, although it has been a bit lethargic lately.”
There was good news on the trade gap, which shrank by £700million in September to £2.75billion.
It helped the pound more easily shrug off news that the UK’s construction industry had technically entered recession for the first time in five years. Across Europe, the French Cac 40 and German Dax fell 0.5% and 0.42%, respectively.
Brent crude prices rose around 0.1% to 63.84 per barrel, as a string of arrests allegedly linked to corruption claims in Saudi Arabia raised fears of further tensions in the Middle East, and investors held out hope for a production cut extension at the Opec meeting slated for November 30.
London Stock Exchange shares edged lower by 13p to 3,720p after confirming it would hold an extraordinary meeting before Christmas to decide the fate of its chairman and chief executive following intense pressure from an activist investor.