LONDON, May 19 — London’s FTSE 100 slipped today, dragged down by heavyweight commodity stocks, while a bigger-than-expected jump in inflation stoked fears that the central bank may tighten its monetary policy earlier than expected.
The blue-chip index fell 1 per cent, with miners declining 2.1 per cent after metal prices slipped. Oil majors BP and Royal Dutch Shell slid more than 1 per cent each.
The domestically focussed mid-cap FTSE 250 index fell 0.4 per cent.
Official figures showed British consumer price inflation more than doubled in April to 1.5 per cent. The Bank of England hopes that the surge in inflation will be temporary as the economy recovers from last year’s Covid-19 slump.
A jump in regulated electricity and gas bills, and clothing and footwear prices pushed up the inflation reading. Prices charged by manufacturers also rose by 3.9 per cent, while inputs prices increased by 9.9 per cent, the most since February 2017.
“A successful vaccine rollout has paved the way for the reopening of the economy, and now consumers are eager to make up for lost time,” said Ambrose Crofton, global market strategist at J.P. Morgan Asset Management.
“Surging demand and supply bottlenecks were always going to lead to a jump in prices. The big question is how persistent these forces prove to be and judging by economists’ forecasts, the jury is still out.”
Globally, the mood was cautious as investors awaited minutes from the US Federal Reserve’s April meeting later in the day, where the policymakers are expected to reiterate their views on rising inflation.
Among individual stocks, Ferguson climbed 3.7 per cent to hit a record high after the plumbing and heating parts distributor reported a 65.4 per cent jump in its third-quarter profit.
John Laing Group jumped 11.1 per cent after private-equity firm KKR agreed to buy the British infrastructure investor in a deal valued at about 2 billion pounds (US$2.84 billion).
Publisher Future gained 9.2 per cent after its first-half results beat market expectations. — Reuters
