The UK benchmark index has fallen deep into the red for a second day, as a Bank of England (BOE) policymaker signalled that a rate hike might come ‘in the coming months’. In individual movers, Carnival (LON:CCL) is underperforming the broader market, as analysts trimmed their rating and valuation on the shares.
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As of 12:26 BST, the FTSE 100 had given up 86.34 points to stand 1.18 percent lower at 7,209.05. The index has extended the previous session’s losses with the pound soaring as influential policymaker Gertjan Vlieghe said that rising wages and soaring employment could mean the BOE will soon have to consider hiking interest rates.
“If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in Bank Rate might be as early as in the coming months,” he said in a speech to the Society of Business Economists’ annual conference, as quoted by The Telegraph. His comments come just a day after the BOE signalled that it might have to start raising rates going forward.
“It’s looking a bit ominous for the FTSE,” said Jasper Lawler, head of research at London Capital Group, as quoted by Reuters. “Given the velocity in the move in the pound, the FTSE can only really go one way and that’s down.”
Geopolitical and security concerns are also weighing on market sentiment, following North Korea’s move to launch another missile, and as several people were hurt in what has now been called a terrorist incident on a commuter train in London.
In individual movers, Carnival share price has fallen 3.90 percent to 4,901.00p, after Credit Suisse trimmed its rating on the group to ‘neutral’. Sharecast quoted the analysts as saying that the cruise ship operator’s earnings growth was likely to slow with significant growth in capacity coming amid greater demand threats in the Caribbean, Mediterranean and China.