FTSE 100 close: London markets dip sharply after inflation remains stagnant in September
London’s FTSE indexes closed deeply in the red on Wednesday after inflation remained stuck at 6.7 per cent, while gilt yields climbed.
The FTSE 100 closed 1.14 per cent lower at 7,588.00 while the FTSE 250, which is more aligned with the health of the domestic economy, ended down 1.62 per cent at 17,403.46.
Markets were uneasy after new figures showed that inflation had not budged in September after August’s surprise fall.
Despite food and drink prices falling compared to last month for the first time since September 2021, rising motor fuel costs helped keep inflation at 6.7 per cent.
Whether or not the data is enough to prompt the Bank of England to hike rates again, it will certainly raise concerns that the economy is in store for a longer period of tight monetary policy.
Although the pound dropped slightly, the yield on the 10-year gilt climbed 0.14 per cent to 4.66 per cent. Yields on the three year, five year and seven year gilt all climbed by similar amounts.
Premier Inn owner Whitbread climbed to near the top of the FTSE 100 after announcing plans to complete a new £300m share buyback scheme.
The buyback came after the firm confirmed that adjusted profit before tax was up 44 per cent year-on-year to £391m. Its shares were up over 1.2 per cent.
At the other end, Barratt fell 5.6 per cent as it warned that trading for the remainder of the year looks tough.
In the three months to October, the London-listed firm said it only built 9,221 homes down from 13,000 compared to the same period last year. Fellow house builder Taylor Wimpey also fell over four per cent while Berkeley fell 2.6 per cent.
On the FTSE 250, William Hill owner 888 reported that revenue from betting and gaming had fallen 10 per cent from the same period last year. Its shares fell 2.7 per cent.