FTSE 100 hits one-month low as record UK wage growth drives pound higher
Reuters
Published Aug 15, 2023 08:22
Updated Aug 15, 2023 17:25
By Siddarth S and Khushi Singh
(Reuters) -Britain's FTSE 100 hit a one-month low on Tuesday, dented by a stronger pound following data that showed basic wages grew at a record pace, spurring concerns about persistent inflationary pressures.
The exporter-heavy FTSE 100 index declined 1.6%, with shares of dollar earners such as drugmaker AstraZeneca (NASDAQ:AZN) and mining major Glencore (LON:GLEN) tumbling as sterling rose 0.4%. [GBP/]
Basic earnings in Britain hit a new record growth rate, data showed, adding to worries for the Bank of England (BoE) about long-term inflation pressures even after 14 back-to-back increases in interest rates.
"The job market is gradually softening which raises questions about how long the economy can actually sustain this wage growth. But in the short term, the BOE will have to remain hawkish," said Steve Sosnick, chief strategist at Interactive Brokers.
The BoE will get one more labour report before its Monetary Policy Committee meets in September. Traders have baked in a nearly 88% chance the central bank will hike interest rates by 25 basis points in September.
The domestic-oriented FTSE mid-cap index fell 0.5%, touching near one-month lows.
However, losses in the index were limited by a 8.3% jump in Marks & Spencer after the retailer raised its profit outlook, adding to evidence that its latest turnaround strategy is delivering.
The retail sub-index rose 1.4%.
Industrial metal miners fell 2.4% to their lowest since August 2022, as prices of base metals fell, hurt by a worsening demand outlook from top consumer China. [MET/L]
Legal & General fell 3% as the insurer and asset manager recorded a 10% drop in assets under management in the year to end June.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.