As it happened: Stocks slip as London’s rally loses momentum
Welcome back to City AM‘s FTSE 100 liveblog.
Stocks in London fell this morning as a three-day rally faded and erased much of the gains made following the Bank of England’s decision to hold interest rates yesterday.
The FTSE 100 was trading down nearly one per cent at 12:50pm, dragged lower by falls for Shell and BP, which have reacted to a slide in oil prices.
“Revived hopes for a resolution to the crisis in the Middle East have helped sustain a recovery in global equities but European stocks took a pause for breath on Friday,” says AJ Bell investment director Russ Mould. “The FTSE 100 wasn’t helped by its heavy weighting in energy as BP and Shell reacted to further falls in the oil price. Brent crude declined for a third consecutive session, even if it remains stubbornly above the $100 per barrel alarm bell mark.”
Oil prices have dipped as concerns over widespread disruption to Saudi Arabian oil supplies eased. Brent prices fell beyond one per cent to $103.34 overnight to put them on track for their first weekly loss in three weeks.
Markets have largely shrugged off fears that attacks from Yemen’s Iran-backed Houthis on Saudi Arabia will choke off supply from the world’s second biggest oil producer. The two sides exchanged fresh strikes across their border on Thursday.
Rising oil prices have fuelled inflationary concerns globally, and the Bank of Japan became the latest central bank to join the fight against rising prices overnight.
The Bank raised interest rates to a 31-year high on Friday and signalled to markets it was ready to keep pushing up borrowing costs to tame inflation driven by the spike in oil in recent months.
The move came after the Bank of England held interest rates yesterday and paused its bond selling programme, pushing UK government borrowing costs lower after a spike in recent weeks.
We will be bringing you all the latest market updates and analysis.
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