Economic growth worries drag down UK shares

After an initial rally after the Fed ruled out a 0.75% rate increase in the near future, investors are now worrying about the impact of the 0.5% hike that was announced yesterday, as well as the central bank's aggressive policy to reduce its balance sheet.

Yesterday, the Bank of England also raised rates, and warned of slow growth ahead. The MPC voted by a majority of 6-3 to raise the Bank Rate by 0.25pp, to 1%, in line with expectations.

Despite worries about economic growth, house prices kept rising last month, gaining 1.1% according to lender Halifax.

Among stocks, British Airways owner IAG was one of the biggest drag on the FTSE 100, after posting an operating loss of 731 million euros (£624 million) in Q1.

 

Things to read today:

BOE Sees 600,000 U.K. Job Losses as PriceforTaming Inflation (Bloomberg)

ECB doves put to flight as interest rates set to rise in July (Financial Times)