By Johann M Cherian
(Reuters) – UK’s main stock indexes slipped on Wednesday as investors took little relief from a softer-than-expected reading on British inflation as they girded for another interest rate hike from the U.S. Federal Reserve.
The export-oriented FTSE 100 index fell 0.3%, while the domestically focused FTSE 250 mid-cap index shed 0.4% by 10:19 GMT.
Miners dropped 0.9%, as gains in copper prices were kept in check by a possible surge in COVID-19 infections in Beijing. [MET/L]
Britain’s headline inflation fell more sharply than expected in November to 10.7%, but inflation in the services sector held at October’s 30-year high of 6.3%.
“Prices are still seeing double-digit increases and, in some areas, inflationary pressures are proving worryingly sticky,” AJ Bell investment director Russ Mould said.
The inflation data follows a report on Tuesday showing UK wage growth rose by a stronger-than-expected 6.1% in the August to October period.
“Since wage growth came in higher than where the Bank of England would like it to be, that’s why the bank is still likely to hike rates by 50 basis points on Thursday,” said Dean Turner, chief euro zone and UK economist at UBS Global Wealth Management.
Markets will now turn their attention to the U.S. Federal Reserve’s monetary policy decision due at 1900 GMT, where the central bank is expected to hike rates by 50 basis points.
Among single stocks, TUI AG fell 7.2% after the world’s largest holiday company said it planned to repay COVID support through a capital raise next year.
BT Group was a bright spot, jumping 2.7% after the telecoms and network provider submitted its new Equinox 2 wholesale fibre offer to the British regulator Ofcom.
(Reporting by Johann M Cherian in Bengaluru; Editing by Rashmi Aich and Maju Samuel)
