Home Headlines FTSE 100 slips on inflation worries, Premier Foods boosts midcaps

FTSE 100 slips on inflation worries, Premier Foods boosts midcaps

by wrich

(Reuters) -UK’s top share index slipped on Wednesday as data showed inflation jumped 9% last month, fuelling fresh worries about the economic toll from surging prices, while Premier Foods supported midcap stocks after it announced plans to raise prices.

The blue-chip FTSE 100 index slipped 0.1%, while the mid-cap FTSE 250 index added 0.1%.

British inflation leapt in April to its highest annual rate since 1982. Soaring energy bills were the biggest driver, reflecting last month’s increase in regulated energy tariffs.

“The risk is that should they (the Bank of England) raise interest rates too quickly at a time when consumers are already feeling the pinch, then this could crimp demand and push the economy into recession,” Ambrose Crofton, global market strategist at J.P. Morgan Asset Management.

“Doing too little, however, risks entrenching inflation expectations and driving a more persistent wage-price feedback loop.”

A report on Tuesday showed Britain’s unemployment rate fell to its lowest since 1974 in the first three months of this year, reinforcing expectations that the central bank will need to continue raising rates to fight inflation.

Sterling slipped after a recent run-up against the dollar. [GBP/]

Premier Foods, the maker of Mr Kipling cakes and OXO cubes, added 4.5% to become the top midcap gainer, as it said it will raise prices of its products as part of plans to tackle rising input cost inflation.

Burberry inched up 0.3% after it met expectations for sales and operating profit for 2022, and said its outlook depended on how quickly China recovered from a COVID-19 lockdown.

Pub operators Marston’s and Mitchells & Butlers slid 3.7% and 2.4%, respectively, after they warned that the cost of living crisis and expenses stemming from the Ukraine war would crimp their businesses.

European travel company TUI’s UK-listed shares fell 11.7% after it announced share sale to pay back German state bailout.

(Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V)

 

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