London shares declined to two-month lows on Tuesday as increasing oil prices drove bond yields higher globally due to inflation concerns, while investors evaluated a series of domestic economic data in anticipation of a central bank policy decision later this week.
The blue-chip FTSE 100 index fell 0.59% to 10,634.49 points by 1000, 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 metal miners fell 1%, while industrial metal miners experienced a decline of 1.7%, reflecting the downward trend in copper and gold prices.
- Global bond yields soared, with 30-year Gilts reaching their highest level since 1998 at 5.91%. This surge reflects investor sentiment that escalating tensions in the Middle East and oil prices exceeding $100 may lead central banks to increase interest rates.
- A report indicated that the Bank of England is set to announce this week its decision to cease the sale of 20- and 30-year gilts, which could potentially provide additional liquidity for finance minister John Healey.
- On the data front, Britain’s jobs market remained weak in the third quarter, while a separate report indicated that grocery price inflation rose to 2.3% over the four weeks leading up to September 6. The official data on inflation is scheduled for release on Wednesday.
- Traders anticipate that the Bank of England will maintain its current interest rates during the upcoming monetary policy meeting this week. However, projections indicate an increase of at least 48.9 basis points by the end of the year, according to data compiled by LSEG.
- 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.
- Despite solid AI-led revenues, investors were disappointed by Trustpilot’s decision to leave its profitability projection unchanged, and the company’s shares fell 13.7%.
