THE pound spiked against the US dollar as investors cheered an upward revision to UK growth in the first quarter.
Sterling was up nearly one per cent against the greenback to trade at 1.320, having dropped to a seven-month low a day earlier as investors worried about Brexit negotiation delays.
A final reading from the Office for National Statistics (ONS) on Friday showed that gross domestic product (GDP) grew 0.2% between January and March, topping previous estimates of 0.1%.
That was thanks to an upward revision in construction output, which mainly reflected improvements to the way the sector's work is measured by the statistics agency.
Craig Erlam, a senior market analyst at trading platform Oanda said the pound was "benefiting from a combination of improved risk appetite but also the small upward revision to first quarter GDP.... which triggered a decent rally in the currency.
"The upward revision goes some way to confirming the view of the Bank of England that the first quarter wasn't as bad as it initially appeared and gives further reason to follow through on plans to raise rates even if that may come a few months after initially intended," he explained.
Sterling failed to make similar gains on the euro, which was itself benefiting data showing a rise in eurozone inflation to 2% in June.
The pound was flat versus the euro at 1.131.
The FTSE 100 ended the day up 0.28% or 21.3 points at 7,636.93 points, while the French CAC 40 and German DAX closed higher by 0.9% and 1%, respectively.
Brent crude prices jumped 2% to $79.07 per barrel as investors prepared for a drop in Iranian oil exports as a result of renewed US sanctions on the country.
Diminished exports from the Middle Eastern country will likely counter jitters over an extended oil supply glut, which has dampened crude prices.
In UK stocks, BAE Systems continued to rise on news that the British defence giant won a £20 billion contract to build a new fleet of Australian warships under a 30-year contract.
BAE Systems shares were up 14.8p at 646.8p.
Reach - formerly known as Trinity Mirror - rose 0.5p to 76.5p as the Daily Mail publisher said in a trading update for the 26 weeks to July 1 that total group revenue is expected to grow by 11%.
That rise reflects the acquisition of Northern & Shell, the company behind the Daily Express and Daily Star.
Serco slumped 1.95p to 98.95p after reporting that first half sales slumped 10.6% and warning that profits would be knocked when it adopts healthcare contracts from Carillion.
Serco's underlying trading profit will be between £35 million and £40 million, the company said, compared with £34 million in the previous year.
Fastjet surged 5.38p to 8.265p after the struggling budget airline outlined plans to secure emergency funding of up to 12 million US dollars (£9.1 million), having earlier this week warned that it was at risk of going bust.
On Friday, FastJet said it will commence a share sale to raise 7 million US dollars (£5.4 million), while its biggest shareholder Solenta Aviation will pump 3 million US dollars (£2.3 million) into the group.
The biggest risers on the FTSE 100 were Micro Focus International up 49.5p at 1,323.5p, Anglo American up 58.8p at 1,694.8p, Rolls-Royce Holdings up 28.6p at 988.2p, and BAE Systems up 14.8p at 646.8p.
The biggest fallers on the FTSE 100 were Carnival down 68p at 4,347p, British American Tobacco down 47p at 3,830p, Whitbread down 36p at 3,959p, and Centrica down 1.4p to 157.65p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here