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UK stocks slip as strong jobs data spurs rate hike worries

07/19/2022 | 05:13am EDT
FILE PHOTO: Pedestrians leave and enter the London Stock Exchange in London

(Reuters) -UK stocks fell on Tuesday after stronger-than-expected jobs data supported the case for a big interest rate hike next month and as shares of online furniture retailer Made.com plunged after an earnings forecast cut.

The blue-chip FTSE 100 fell 0.2% in morning trade, while the domestically focussed midcap 250 index slipped 0.1% tracking Wall Street's move overnight. [.N]

Britain's unemployment rate held at 3.8% in the three months to May and the number of people in work rose by the most since the middle of 2021, data showed, suggesting the cost-of-living squeeze has not yet hit demand for staff.

Traders were pricing in an 86% chance of an aggressive 50 basis point rate hike next month, with consumer prices and retail sales data due later this week likely offering fresh clues on inflation and health of the British consumer.

"Investors will be surprised if they (BoE) don't do a 50 basis points (bps) rate hike in August," said David Madden, market analyst at Equiti Capital.

"For the June meeting, they only hiked by 25 bps. This time around, all the central banks around the world are not only hiking, but doing large hikes. The cost-of-living crisis is the absolute number one story in the UK."

Among individual stocks, UK-listed shares of BHP Group slipped 1.2% after the global miner joined rival Rio Tinto in warning that a tight labour market, supply-chain snags and inflationary pressures would continue through fiscal 2023.

Money transfer company Wise jumped 12.7% after posting strong revenue growth.

Cybersecurity firm Darktrace Plc added 7.4% after it raised its full-year profit margin forecast on the back of steady customer growth.

The biggest decliner on the small-cap index was Made.com, which slumped 39.5% to a record low, after the company slashed its sales and earnings guidance for 2022, saying it did not expect an improvement in demand for big-ticket items any time soon.

(Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V and Amy Caren Daniel)

By Sruthi Shankar


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.03% 0.58194 Delayed Quote.11.86%
BHP GROUP LIMITED 1.78% 38.77 Delayed Quote.13.51%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.00% 0.654729 Delayed Quote.16.15%
DARKTRACE PLC -4.72% 299 Delayed Quote.-25.32%
EURO / BRITISH POUND (EUR/GBP) 0.02% 0.88016 Delayed Quote.6.46%
FTSE 100 -1.77% 6881.59 Delayed Quote.-5.13%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -2.41% 0.011037 Delayed Quote.14.94%
RIO TINTO PLC 0.82% 4894 Delayed Quote.-0.78%
US DOLLAR / BRITISH POUND (USD/GBP) 0.09% 0.895945 Delayed Quote.26.12%
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