A strong day for miners with Fresnillo and Randgold Resources up 5.03% and 3.62% taking values to 1,503p and 7,150p respectively.
However Hikma Pharma and Centrica took heavy bruisings, down -8.23% and -5.41%. Also BT, down -4.5% to 297.85p as investors woke to a jobs cull and news of boss Gavin Pattinson’s pay cut.
Earlier today the Bank of England (BOE) snipped its GDP forecast, trimmed to 1.9% from 2.0%, but maintained interest rates at 0.25% on a 7-1 vote. Significantly, the BOE hinted interest rates may edge up earlier than thought.
Despite the threat of a rate hike sterling earlier slipped 0.5% against the dollar and euro. The higher euro also put pressure on European stocks with both the Dax and CAC 40 falling around 0.65% at points.
In the US, stocks tumbled sharply - the worst daily drop since mid April – with the Dow down -0.55% at around the 20,832 mark. Home Depot and DuPont fell almost 1.5% and 1.13% respectively.
Responding, Gold is up 0.65% to 1,226.80 while WTI oil also saw a bump, up 1.4% to 47.98, thanks to a dip in weekly US crude inventories.
No end to wage squeeze
The Bank of England has warned of a continuation of the spending squeeze as real wages stagnate and shop price hikes continue to dent consumer confidence.
As far as inflation goes, the Bank hiked its inflation forecast from 2.4% to 2.7%.