UK shares fell more than 1 per cent on Wednesday after the country’s inflation accelerated to a 40-year-high, adding further pressure on the Bank of England to raise interest rates, while falling crude and metals prices sent commodity-linked stocks tumbling.
The exporters-heavy FTSE 100 index fell 1.5 per cent despite weakness in the sterling, while the domestically-focussed mid-cap FTSE 250 index declined 1.3 per cent, erasing nearly all of this week’s gains.
Soaring food prices pushed UK consumer price inflation to a new 40-year high last month of 9.1 per cent, the highest rate out of the Group of Seven countries.
Miners were the biggest drag on the index, falling 3.0per cent as industrial metals prices plunged amid US dollar strength and worries over an economic downturn.
Energy stocks also weighed, retreating from a recent rally after crude prices dived more than $4 a barrel amid a push by US President Joe Biden to bring down soaring fuel costs.
Harbour Energy fell 2.2 per cent after the oil and gas producer told the British government that Britain’s planned windfall tax on the energy sector will shrink the company’s investment in the country.
Mike Ashley's Frasers Group dropped 1.1per cent after saying it had increased its stake in German fashion brand Hugo Boss.
NatWest Group gained 1.4per cent to top gains in the FTSE 100 after the British government said it was extending a trading plan to help sell down the taxpayer’s stake in the British lender by another 12 months. - Reuters
(c) Copyright Thomson Reuters 2022
