Stronger pound weighs on FTSE 100 as June inflation jumps

July 14 (Reuters) – London’s FTSE 100 fell on Wednesday as a stronger pound weighed on export-oriented retailers, while the country’s inflation for June exceeded the central bank’s target for a second consecutive month.

The blue-chip FTSE 100 index (.FTSE) slipped 0.3% as travel stocks (.FTNMX405010) fell nearly 0.7%. Retailers Unilever (ULVR.L), GlaxoSmithKline (GSK.L) and Diageo (DGE.L) were among the main drag as the pound rose after inflation hit its highest level in nearly three years .

The domestically focused mid-cap index (.FTMC) fell 0.4%, with Cineworld (CINE.L) the first loser.

British inflation again exceeded the Bank of England’s June target of 2.5%, down from 2.1% in May, driven by higher prices for food, fuel and cars. second-hand clothing and footwear, according to official data released Wednesday. Read more

This pushed UK benchmark 10-year bond yields up five basis points, but comments from the central bank that the peak is likely to be transient helped limit further losses.

“We are still stuck in the limbo of inflation, where we cannot say whether the rise in prices is a statistical incident or a more worrying and permanent feature of the global economic recovery,” said Laith Khalaf, financial analyst at AJ Bell.

The blue-chip FTSE 100 has gained nearly 10% so far this year, supported by low interest rates, but its growth rate has slowed since June to trade around the 7,100 level as the Rising COVID-19 cases and inflation weighed on investor mood.

Among stocks, AstraZeneca (AZN.L) lost 0.7% and was the main drag on the FTSE 100. The UK competition regulator has cleared its $ 39 billion buyout of US company Alexion (ALXN.O) ). Read more

Barratt Developments (BDEV.L) gained 1.3% after forecasting 2021 profit to be slightly above market expectations. Read more

Fast food company SSP Group (SSPG.L) fell 2.7% following plans by its chief executive to step down at the end of 2021 to join a private equity firm.

Reporting by Shashank Nayar in Bangalore; Editing by Subhranshu Sahu and Uttaresh.V

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