Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

UK stocks slip as rate hike worries grip investors

by Wanda Rich
0 comments
2023 02 06T083017Z 1 LYNXMPEJ150C7 RTROPTP 4 BRITAIN CHINA

By Sruthi Shankar and Shashwat Chauhan

(Reuters) – The UK’s FTSE 100 closed lower on Monday, as upbeat U.S. economic data last week sparked fears of further monetary tightening and as a top Bank of England (BoE) official voiced concerns that rates need to stay higher for longer.

The blue-chip FTSE 100 fell 0.8% after briefly hitting a new record high in the previous session, while the domestically-focused FTSE 250 recorded a near 1% drop after climbing to an eight-month peak last week.

Nearly all major sectors finished in the red, but precious metal miners eked out a meagre rise of 0.7%.

China-exposed financial services firm Prudential fell nearly 5% on concerns around elevated Sino-U.S. geopolitical tensions.

Globally, stocks wilted and government bond yields rose after last week’s upbeat economic data from the United States and other economies lessened the risk of recession, but also suggested rates might have to be hiked further.

“Markets are pricing some cuts this year and I think that is not going to work, that’s not going to be what transpires, so there is room for downside from here for equities,” said Vivek Paul, UK chief investment strategist at BlackRock Investment Institute.

BoE rate-setter Catherine Mann backed further increases in interest rates and warned that pausing risked a confusing “policy boogie” if it turned out rates would need to rise again.

The Bank of England delivered its 10th straight interest rate hike last week and signalled the tide was turning in its battle against high inflation.

Data on Monday showed Britain’s construction sector had its worst month in almost three years in January as rising borrowing costs hit house-building hard.

Looking ahead, the week houses some big corporate earnings, including oil major BP, drugmaker AstraZeneca and consumer goods maker Unilever.

Among individual stocks, Hargreaves Lansdown fell 3.3% after Credit Suisse downgraded the wealth manager’s shares to “underperform” from “neutral”.

 

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich and Sharon Singleton)