London’s FTSE 100 index closed 1.31 per cent lower today as investors failed to be enthused by data showing the UK’s economy is faring better than expected following the Bank of England’s (BoE’s) decision to hike interest for the eleventh time in a row.
The capital’s premier index fell 1.05 per cent to 7,424.71 points in this morning’s session, while the UK’s mid cap FTSE 250 index, which is more aligned with the health of Britain’s economy, slipped by 0.8 per cent to 18,579.36 points.
The FTSE 100 index failed to recover throughout the day, in closing 1.31 per cent lower than at opening, as the FTSE 250 posted similar losses in closing 1.26 per cent below its value at the start of the day.
The FTSE indexes failed to be lifted by Office for National Statistics (ONS) figures showing UK retail sales increased more than expected in February, after jumping by 1.2 per cent.
Despite the sharp increase, however, retailers have struggled with inflation, which surprisingly increased to 10.4 per cent this week.
Despite a “subdued” outlook due to the cost of living crisis, the High Street is looking ahead to the Easter holidays where there is expected to be an uptick in retail sales.
The Federation of Small Businesses (FSB) also reported that 370,000 small firms are at risk of downsizing due to the energy crisis.
Survey data from market research company GfK, showing consumer confidence increased in March for the third time in a row, despite the UK’s cost-of-living crisis, also failed to stir enthusiasm in investors.
The dip follows the BoE’s decision to hike interest rates by a quarter of a percentage point, to 4.25 per cent, after inflation in the UK economy jumped from 10.1 per cent in January to 10.4 per cent the following month.
Shares in German travel company Tui plummeted by 9.44 per cent in the early morning session after the Hanover firm set out plans to raise €1.8bn (£1.6bn) to repay Covid debts.
HSBC shares fell 2.44 per cent as banking shares continued to suffer from the fallout of Silicon Valley Bank and Credit Suisse.
Shares in pub group JD Wetherspoon were, however, buoyed by the positive ONS retail figures causing them to jump 6.91 per cent.
The pound fell slightly against the dollar.
Brent Crude prices fell 1.38 per cent.