LONDON: UK shares slipped on Tuesday as expectations of more tightening by major central banks weighed, while JD Sports fell after the national antitrust watchdog found the retailer involved in price-fixing.
The blue-chip FTSE 100 fell 0.1% with banks leading losses, while the midcap index fell 0.5%.
UK Prime Minister Boris Johnson survived a confidence vote on Monday, but a large rebellion in his Conservative Party over the “partygate” scandal dealt a blow to his authority, raising questions about his handling of Britain’s economic challenges.
“Johnson has effectively lost authority and the UK faces a period of political drift. Markets don’t like uncertainty and this is reflected in the UK this morning,” said Stuart Cole, head macro economist for Equiti Capital.
“The market is now left facing the prospect that dealing with the cost of living crisis will play second fiddle to Johnson’s attempts to remain in power and this is simply seeing fears over growth loom large again.” British shoppers facing a surge in inflation cut their spending in May by the most since the country was in a COVID-19 lockdown in early 2021, according to a survey. Markets now await S&P Global/CIPS Purchasing Managers’ Index data for May for clues on business activity.
Investors also focussed on Bank of England and US Federal Reserve’s rate decisions next week, and a European Central Bank meeting on Thursday.
Money markets discount an aggressive monetary tightening path from the BoE despite concerns of economic slowdown as they price in more than 140 basis points of rate hikes by year-end.
Ted Baker plunged 18.4% after the fashion chain said its preferred bidder will not make a takeover offer.
Britain’s biggest sportswear retailer JD Sports Fashion fell 3.9% after UK’s competition watchdog provisionally found that JD Sports and Elite Sports, along with the Rangers Football Club, fixed retail prices of certain Rangers-branded clothing products.
Retailers were among top decliners on the FTSE 100, down 2.2%, while oil & gas stocks rose 1.0% on the back of stronger crude prices.
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