Stock markets down on gloomy inflation outlookwritten by Bella Palmer
London’s FTSE 100 lost 14.37 points, or 0.19 per cent, to end at 7,481.99
A downbeat investor mood swept across UK stock markets on Tuesday ahead of policymakers meeting in the US and after a gloomy inflation outlook from the Bank of England’s governor.
London’s FTSE 100 dropped with gambling giants Entain and Flutter Entertainment among the day’s biggest decliners.
The blue-chip index lost 14.37 points, or 0.19 per cent, to end at 7,481.99.
Minutes from the US Federal Reserve’s conference are scheduled to be released this evening and investors will be watching for further evidence that higher interest rates are working and inflation is on its way down for the world’s biggest economy.
It comes after a series of remarks from BoE governor Andrew Bailey over the UK inflation warning.
On Monday evening, he said it “much too early” to say inflation has been beaten, but it is too early to start talking about cutting rates.
And on Tuesday, Bailey cautioned that financial markets may be “underestimating” the persistence of inflation as the Bank continues in its efforts to return it to 2 per cent.
David Morrison, senior market analyst for Trade Nation, said: Central bankers everywhere seem anxious to dial back expectations that the next move in interest rates will be down.
While (the Monetary Policy Committee’s) forecasts for year-end inflation look like being a tad better than expected, they insist that there is still work to be done and further tightening cannot be ruled out, as inflation risk remains to the upside.
Elsewhere in Europe, Germany’s Dax slid by just 0.01 per cent while France’s Cac slipped by 0.26 per cent.
The pound continued its rise, adding 0.3 per cent against the US dollar to 1.2537, and increasing nearly 0.5 per cent against the euro to 1.1474.
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