UK equities fall despite cooling August inflation By Reuters
Economy 5 minutes ago (Sep 14, 2022 17:21)
© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo
By Johann M Cherian, Bansari Mayur Kamdar and Aniruddha Ghosh
(Reuters) -Britain’s main stock indexes fell on Wednesday after a surprise fall in consumer prices did little to calm speculation of a large interest rate hike from the Bank of England next week.
The blue-chip FTSE 100 slid 1.5% and the mid-cap FTSE 250 fell 1.7%, extending losses from Tuesday when a hotter-than-expected U.S. inflation reading raised bets for more aggressive policy tightening in the world’s largest economy and sparked a global equities sell-off.
Investors took little comfort from data that showed British consumer price inflation fell for the first time in almost a year in August on the back of lower fuel prices.
“The market is taking the view that generally we’re living in a higher inflation regime despite today’s inflation numbers,” Andrea Cicione, head of strategy at TS Lombard said.
“One data point doesn’t make a trend and inflation could actually get worse in months to come. So the Bank of England will want to see a definite trend of lower inflation before they start reining back the hawkish rhetoric.”
Traders see an 87% chance of a 75 basis point interest rate hike to 2.5% by the Bank of England on Sept. 22, which would be its biggest rate rise since 1989, excluding a brief attempt to bolster sterling during a 1992 exchange rate crisis. [IRPR]
“The 9.9% inflation is still bad news after we’ve had six rate hikes by the Bank of England since December last year,” said David Madden, a market analyst at Equiti Capital.
Among sectors, construction and materials and homebuilder indexes declined the most as housebuilders brace for a tough market, hurt by rising mortgage rates and a worsening cost-of-living crisis.
Redrow (LON:RDW) slipped 0.3% after the housebuilder said demand was moderating to historical levels following two strong years for the sector.
UK equities fall despite cooling August inflation
By Shreyashi Sanyal (Reuters) -European shares dipped on Wednesday after higher-than-expected U.S. inflation cemented views of a large interest rate hike by the Federal Reserve…
BUDAPEST (Reuters) – Hungarian doctors and some opposition parties protested on Wednesday against a pending change in abortion rules that will require pregnant women to prove they…
ROME (Reuters) – The Italian government on Wednesday moved to reverse a controversial attempt by the outgoing parliament to weaken a salary cap for senior public servants. In a…
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.