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* Tesco profit warning drags retailers lower
* FTSE 100 adds 0.1%, FTSE 250 off 0.1%
April 13 (Reuters) - UK midcaps slipped on Wednesday after
data showed annual inflation last month rose to a three-decade
high, intensifying a cost-of-living squeeze faced by households
and hit to the profits of supermarket companies like Tesco.
The domestically focused FTSE 250 index ended 0.1%
lower, extending its year-to-date loss to 10.7% on concerns
about the economic outlook due to surging price pressures.
Britain's consumer price inflation (CPI) leapt to 7% in
March, sharper than a forecast 6.7% increase, and ramping up
doubts about how aggressive the Bank of England will move to
tighten its monetary policy.
Core CPI, which excludes food, energy, alcohol and tobacco
prices, rose to 5.7% last month from 5.2% in February.
"Inflation is now everywhere. Price rises are broad-based
and gaining momentum ... this, we think, will shift the
conversation away from March's more dovish policy message,"
Deutsche Bank senior economist Sanjay Raja said in a note.
"The intensifying cost of living crisis will only add to the
UK's recession risks, something we think the MPC (monetary
policy committee) will be carefully watching as we move into
Tesco fell 2% to weigh the most on the FTSE 100
after Britain's biggest retailer warned of a drop in profits
this financial year due to the tough economic conditions and
pressure on consumers alike.
Shares of rivals Sainsbury's, Marks and Spencer
and Ocado Group slipped between 2.1% and 2.6%.
The FTSE 100 inched up 0.1%, with oil major Shell
and miners Glencore and Anglo American
rising between 0.7% and 1.2%.
A jump in sterling in the wake of inflation data also
capped gains on the blue-chip index, which houses large dollar
earning companies like Diageo.
British Airways parent IAG rose 3.8% to top the
FTSE 100 index. Its U.S. peer Delta Air Lines said
robust consumer demand not only helped it post a "solid" profit
in the month of March, but is also allowing the carrier to
offset soaring fuel costs with higher fares.
(Reporting by Devik Jain in Bengaluru; editing by Uttaresh.V,
Subhranshu Sahu, William Maclean)