FTSE 100 close: London markets fall deeply into the red after Bailey’s hawkish comments on interest rates
London’s FTSE 100 closed the week deeply in the red, having opened marginally higher, after investors were shaken by hawkish comments from Andrew Bailey, governor of the Bank of England.
The FTSE 100 fell 0.60 per cent to trade 7,598.72 while the midcap FTSE 250, which is more aligned with the health of the domestic economy, dropped 2.0 per cent to 17,486.11.
In early trade the FTSE 100 managed to eke out some gains thanks to its oil giants, who benefited from rising oil prices.
A barrel of brent oil was trading 2.1 per cent higher at just under $88 today. Shell climbed 1.5 per cent while BP climbed 2.2 per cent.
However, markets fell into the red after Bailey warned that the “last mile” would be the hardest in the fight against inflation.
Speaking at an event hosted by the Institute of International Finance, he said “there has been solid progress in terms of showing signs that inflation is being tackled, but let’s not get carried away because there’s an awful lot still to do.”
“This is why the decision of our last meeting was such a tight one. And…they’re gonna go on being tight ones.”
His comments come after chief economist Huw Pill said that decisions on interest rates for the remainder of the year would be “finely balanced”.
On the FTSE 100 St James’s Place closed over 20 per cent lower.
The London-listed funds group said in a statement this morning it was conducting an “assessment” of its fees and charging models after the introduction of the Consumer Duty this summer.
The group has also come under fire in recent months for topping a list of poor performing money managers with the most so-called ‘dog funds’.
JD Sports, Spirax-Sarco and Ocado were the other largest fallers, dropping 4.8 per cent, 4.7 per cent and 7.5 per cent respectively.
Elsewhere, the Competition and Markets Authority gave the green light to Microsoft’s revised offer for Activision.
Under the new agreement, Microsoft surrendered their cloud rights to existing Activision games such as Call of Duty or any new games released during the next 15 years.