UK stocks close higher after Warsh’s comments

Aug 28 (Reuters) – UK stocks closed higher on Friday as investors digested corporate updates as well as Federal Reserve Chair Kevin Warsh’s comments at the Jackson Hole symposium that boosted the chances of a U.S. interest rate hike next month. 

The blue-chip FTSE 100 rose 0.3% to 10,824.26 points, ending the week nearly flat. The midcap FTSE 250 added 0.2% to 24,938.79 points and recorded a weekly gain of nearly 1%.

• The U.S. central bank will “have work to do” if policymakers don’t get the confidence they need that inflation is heading down to 2%, Warsh said, which the markets interpreted as an acknowledgement interest rate hikes may be needed to ease price pressures.

• U.S. stocks were mixed, while the dollar gained ground as traders anticipated a nearly 60% chance that the U.S. central bank will raise interest rates in September, compared with 35% a day ago, according to CME Group’s FedWatch tool.

• Still, investors have been paring back expectations of a rate hike from the Bank of England this year.

• Oil prices dipped on Friday, with Brent crude trading around $89 a barrel as traders continued to monitor a deadlock in U.S.-Iran diplomacy. [O/R]

• British businesses turned the most confident since March this month, bolstered by a rosier view of the economy, according to a survey that echoes other signs of an improving outlook.

• Among single stocks, Goodwin climbed 1.4% after the mechanical engineering company reported full-year trading profit of £77.50 million ($105.3 million), more than double from a year ago.

• Recruiter Hays climbed about 5.1% after Panmure Liberum upgraded the stock to “buy” from “hold”.

(Reporting by Anand Gopal and Sruthi Shankar in Bengaluru; Editing by Shailesh Kuber and Barbara Lewis)