London shares slip as higher oil prices lift bond yields; BoE in focus

London shares slipped to two-month lows on Tuesday as rising oil prices pushed bond yields higher globally over inflation concerns, while investors assessed a batch of domestic economic data ahead of a central bank policy verdict later this week.

The blue-chip FTSE 100 index fell 0.59% to 10,634.49 points by 1000 GMT, while the midcap FTSE 250 slipped 0.46%.

Heavyweight lenders and investment banks and brokerages were the top drags on the index, with Standard Chartered down 1.7% and Aberdeen dropping 2.6%.

Precious and industrial metal miners also fell 1% and 1.7%, respectively, tracking weaker copper and gold prices.

Global bond yields soared, with 30-year Gilts at their highest since 1998 at 5.91%, as investors bet that escalating Middle East tensions and oil above $100 could prompt central banks to hike interest rates.

A report said that the Bank of England is poised to announce this week that it will stop selling 20- and 30-year gilts, potentially freeing up some cash for finance minister John Healey.

On the data front, Britain’s jobs market stayed weak in the third quarter, while a separate report showed grocery price inflation increased to 2.3% over the four weeks to September 6. The official data on inflation is due on Wednesday.

Traders see the Bank of England leaving interest rates unchanged at its monetary policy meeting later this week, but still see rates rising by at least 48.9 basis points by year-end, LSEG-compiled data showed.

Wickes Group gained 10% after the home improvement retailer reported strong third-quarter trading, driven by mid-single-digit growth in retail like-for-like revenue.

Online reviews platform Trustpilot’s shares plummeted 13.7% as its decision to leave its earnings outlook unchanged disappointed investors, despite strong AI-led revenues.