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September 1 (Reuters) – The UK’s FTSE 100 index fell sharply on Thursday as mining stocks dragged the commodity-heavy index lower on fears that central bank interest rate hikes weigh on demand, while slowing factory data from Asia further clouded the global economic outlook.
The FTSE 100 slipped 1.0% at 0810 GMT, extending losses for its fourth consecutive session.
“This is partly because of higher interest rate expectations in the US, where the Bank of England may now be forced to slow rate hikes as Britain faces a squeeze on the cost of living,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown.
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Traders see a 74% chance that the Bank of England will raise interest rates by 50 basis points at its September meeting to curb inflation. IRPR
Miners (.FTNMX551020) fell 3.6% as metal prices fell on demand concerns after new data from major global economies signaled tepid growth.
The domestically focused FTSE 250 fell 1.3%.
Both the FTSE 100 and FTSE 250 posted monthly declines in August as aggressive central bank tones despite signs of an economic slowdown affected global risk sentiment.
Household expectations for average inflation over the next five to 10 years have hit an all-time high, according to a monthly survey by YouGov and US bank Citi. Read more
Investors’ attention turned to August manufacturing data, due out at 0830 GMT, for further clues to the strength of the UK economy.
Reckitt Benckiser (RKT.L) fell 4.3% after the company announced its CEO Laxman Narasimhan would step down at the end of September. Read more
“It’s kind of a double uncertainty as to what lies ahead given he’s been in the business for three years and at a time when market conditions are tougher, especially for companies like Reckitt Benckiser, which are heavily dependent on consumer spending,” Streeter added. .
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Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Krishna Chandra Eluri
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