FTSE and pound slip as investors await UK inflation news
The FTSE 100 moved 19.17 points lower, or 0.25%, closing at 7,569.31.
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Your support makes all the difference.London’s FTSE 100 has slipped into the red and the pound has lost ground as concerns over the UK’s mortgage market mount.
The blue-chip index was pulled down with banks and mining stocks among the biggest fallers.
It moved 19.17 points lower, or 0.25%, closing at 7,569.31. Meanwhile, the pound slipped by 0.5% to 1.2725 against the US dollar, and fell 0.3% to 1.1675 against the euro.
The relatively downbeat sentiment comes ahead of key UK inflation figures on Wednesday and the Bank of England’s interest rate decision on Thursday.
Chancellor Jeremy Hunt is also due to meet mortgage lenders later in the week to discuss what help they can give to borrowers struggling with their mortgage, as rates have shot up amid soaring gilt yields.
The Bank of England is expected to push interest rates higher on Thursday as inflation has stayed persistent.
Mr Hunt said the Government wants to help mortgage holders in a way that will not “feed inflation”.
The Chancellor might have ruled out Government help for mortgage holders facing a horrifying cliff edge but there’s little doubt that what’s happening in the mortgage market is deeply destabilising to the economy
Danni Hewson, AJ Bell’s head of financial analysis, said: “Inflation worries have dogged UK investors today ahead of the all-important new Consumer Prices Index (CPI) number that we get in the morning.
“The headline is expected to have fallen again but looking at the painfully slow progress being made when it comes to groceries, no-one expects May’s figure will cool significantly enough to change the narrative.
“Thursday’s rate rise looks nailed on but what is beginning to filter through to markets is uncertainty about what comes next.
“The Chancellor might have ruled out Government help for mortgage holders facing a horrifying cliff edge but there’s little doubt that what’s happening in the mortgage market is deeply destabilising to the economy.”
Other major European stock markets felt the weaker mood on Tuesday. Germany’s Dax index fell by 0.55% and France’s Cac 40 slipped by 0.27%.
Trading in the US started firmly on the backfoot after the long weekend with Juneteenth celebrated on Monday. The S&P 500 was down 0.75% and Dow Jones was down 0.9% by the time European markets closed.
In company news, shares in Lookers soared after the car dealership group agreed to a takeover worth £465 million by a Canadian firm.
Lookers said the deal was attractive to shareholders as it values its shares at around 35% more than they were trading at on Monday.
Shares in Lookers jumped by a third on Tuesday as investors looked to cash in on the buyout.
Saga saw its share price move higher after announcing its cruise ship business was in high demand and it is expecting a hike in profits this year.
It said it had managed to fill most of its spots for this season and was already beginning to fill up bookings for the 2024 to 2025 season. Shares in Saga increased by 4.1%.
The biggest risers on the FTSE 100 were Beazley, up 15.5p to 590.5p, Rolls-Royce Holdings, up 3.2p to 157p, B&M European Value Retail, up 9.8p to 566.4p, Flutter Entertainment, up 215p to 16,165p, and IMI, up 20p to 1,636p.
The biggest fallers on the FTSE 100 were Anglo American, down 99.5p to 2,384.5p, NatWest Group, down 7.4p to 245.3p, Prudential, down 28.5p to 1,100.5p, Ocado Group, down 10.9p to 424p, and Antofagasta, down 34p to 1,482.5p.