Downbeat IMF growth projections weigh on London’s top indexes
London’s top indexes were weighed down today by the world’s economic watchdog downgrading its forecasts for the UK and global economy.
The capital’s premier FTSE 100 index closed 0.2 per cent lower at 7,601.28 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, dropped 0.75 per cent to 20,962.17 points.
The City was wobbled by the International Monetary Fund laying bare the damage it expects a global inflation crunch and the Russia-Ukraine war to deal to global growth.
The UK’s 2022 growth rate was cut one percentage point to 3.7 per cent. Next year, the country is forecast to post the weakest rate of expansion among the G7.
Global growth was slashed 0.8 percentage points to 3.6 per cent off the back of the Russia-Ukraine war intensifying inflationary pressures.
Households in the UK are projected to suffer the worst hit to their living standards since the mid 1950s as a result of wages failing to keep pace with an average inflation rate of over seven per cent over the course of the year.
Consumers are anticipated to cut spending in response to weaker spending power, hitting British GDP growth, knocking market sentiment.
Broadcaster ITV was among the biggest fallers on the FTSE 100, falling 3.61 per cent.
Dettol manufacturer Reckitt Benckiser was also one of the steepest fallers on the index, dropping 1.75 per cent. The firm had been one of the big winners during the pandemic as demand soared for hygiene products.
Oil mega caps were a bright spot, with Shell closing 1.64 per cent higher.
The pound was flat against the dollar.