LONDON MARKETS: FTSE 100 Ends Lower As U.K. Inflation Hits 5-year High
2017年10月18日 - 01:53AM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
Consumer price inflation now a full percentage point above
target
U.K. stocks finished lower on Tuesday after investors received
inflation data that could harden the case for the Bank of England
to raise British borrowing costs.
The FTSE 100 index fell 0.1% to close at 7,516.17, after darting
between small gains and losses through the day.
Among big movers Tuesday, shares of Merlin Entertainments PLC
(MERL.LN) tumbled 16%. The theme-park operator reported that its
year-to-date comparable-revenue growth was flat,
(http://www.marketwatch.com/story/merlin-says-revenue-hit-by-weather-terror-attacks-2017-10-17)
saying its London sites were hurt by bad weather and the effect of
terrorist attacks.
Accelerating inflation: The key focus for U.K. assets Tuesday
was the reading on consumer price inflation for September, which at
3% is the strongest level since March 2012 and above the Bank of
England's 2% inflation target.
The report may contribute to the Bank of England deciding to
raise its key interest rate, which stands at a record low
0.25%.
Bank stocks mostly held to gains on the prospect of a U.K. rate
increase, as it could prompt banks to charge more for loans.
Barclays PLC (BCS)(BCS) climbed 1.1%, while Lloyds Banking Group
(LLOY.LN) (LLOY.LN) added 1.1%. Royal Bank of Scotland Group PLC
(RBS.LN) (RBS.LN), however, slipped 0.3%.
"While the market now expects the first hike in November, having
recently brought forward its expectations from as late as 2019,
current pricing suggests the market is anticipating only one
further hike in 2018," said Kallum Pickering, senior U.K. economist
at Berenberg, in a note.
"We therefore expect the BoE to strengthen its guidance after
the first hike, leading to a somewhat steeper gilt curve and
possibly a stronger sterling on a trade-weighted basis by the turn
of the year," he said.
Read:'Might finally be time to get on with rate rises'--analysts
on BOE's next move after inflation report
(http://www.marketwatch.com/story/might-finally-be-time-to-get-on-with-rate-rises-analysts-on-boes-next-move-after-inflation-report-2017-10-17)
The pound traded sharply lower at $1.3180, compared with $1.3250
late Monday in New York as traders appeared to focus more on Prime
Minister Theresa May failing to break the deadlock in Brexit talks
(http://www.marketwatch.com/story/uk-leader-theresa-may-fails-to-make-brexit-breakthrough-at-brussels-dinner-2017-10-17)
than. In an unusual move, May traveled to Brussels Monday to have
dinner with the head of the European Commission, Jean-Claude
Juncker and the bloc's Brexit negotiator, Michel Barnier, to move
divorce proceedings along.
A fifth round of talks ended last week with the EU's Barnier,
saying progress is still insufficient for negotiations to move to
the next phase.
Read:Brexit is far from the only worry for U.K. stocks
(http://www.marketwatch.com/story/brexit-is-far-from-the-only-worry-for-uk-stocks-2017-10-14)
Stock movers: Pearson PLC shares (PSON.LN) sprang up 7.3% after
the educational materials publisher raised the lower end of its
full-year earnings outlook.
(END) Dow Jones Newswires
October 17, 2017 12:38 ET (16:38 GMT)
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