The FTSE 100 finished slightly higher on Friday as analysts wrote off a June rate hike after a disappointing US non-farm payrolls report.
The US non-farm payrolls increased 160,000 last month, compared to forecasts of 200,000 and 215,000 in March, the Labor Department revealed.
The unemployment rate was unchanged at 5.0%, as anticipated by analysts.
Many analysts said they believe an interest rate hike by the Federal Reserve at the next policy meeting in June is unlikely after the worse-than-expected data on the labour market.
June seemed to be something of a long shot, especially given that other central banks continue to ease, but with unemployment stuck at 5% and little sign of enthusiastic job creation, it has become a non-starter.
Analysts now only expect one rate hike in 2016, in September, down from two hikes previously, as they believe it will take longer for policymakers to accumulate sufficient evidence that economic and labor market activity is rebounding after a soft start to the year.
“If the economy improves along the lines of our baseline forecast, there is risk of a second rate hike this year in December” they added.
In parallel, oil prices managed to claw back some of their month-to-date losses
West Texas Intermediate crude oil futures ended the day up by 1.66% to $45.07 a barrel and Brent crude was 1.66% higher at $45.77.
Gold advanced while oil had a volatile session as the market weighed up the potential impact on supply of the devastating wildfire in Canada’s oil sands region. Gold broke above $1,300 an ounce for the first time since January 2015 during the week eventually settling at $1,294 an ounce.