London Report: Yellen warning and rise in UK inflation cause FTSE to slip

BRITAIN’S top shares lost ground yesterday after US Federal Reserve chair Janet Yellen voiced concern over valuations. And housebuilders were hit by growing expectations UK interest rates would soon rise, while Imperial Tobacco fell sharply.

The FTSE 100 index was down by 0.53 per cent – 35.69 points – at 6,710.45 points.

Imperial Tobacco sank three per cent, making it the top FTSE 100 faller, following news that Reynolds American would buy rival Lorillard, and sell brands to the British cigarette maker to address antitrust issues.

Markets were also hit by Yellen’s comments to a Senate committee that the US economic recovery was incomplete, justifying a loose monetary policy for the foreseeable future.

Shares in housebuilders, volatile in recent weeks, came under pressure as a report showed UK inflation unexpectedly rose to a five-month high in June. Barratt Developments fell 2.1 per cent, while mid-caps Redrow and Taylor Wimpey fell by 3.4 per cent and 2.9 per cent respectively

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