Stock markets fall as inflation rises and recession fears intensify Business News

Stock markets fell in London and across Europe on Thursday as fears grew that runaway price rises could soon trigger a recession.

The FTSE 100 index for large company charges fell 2% to 7,288.56 after inflation hit a 40-year high and markets reacted to Wall Street’s worst day since the peak of the pandemic.

The London Stock Exchange was in the red as selling accelerated and 96 of the top 100 stocks fell in value. The pound fell slightly to $1.2375 from $1.2394 at yesterday’s close.

Germany’s DAX index also fell 2%, with France’s CAC down 1.9%. In Asia, Hong Kong’s main stock index lost 2.1% of shares and Japan’s Nikkei lost 1.7%.

Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said disappointing results from US retailers rattled markets.

“The decline was triggered by US retail giant Target warning that customers were already buying fewer big-ticket items like furniture and electronics, with fuel prices and supply chain costs higher. which also ate up margins, closely following Walmart’s.

“With consumer purchasing power set to erode further due to rising interest rates, the concern is that Target’s pain is a precursor to even more trouble to come for retailers. “

Consumer confidence in the UK has been shaken by grim news on the cost of living. Data on Wednesday showed UK inflation hit its highest annual rate since 1982 as energy bills soared.

Economists are increasingly worried that a sharp slowdown in spending as shoppers tighten their belts could trigger a recession.

The Bank of England predicts the economy will contract in the last quarter of this year when households are hit by another big rise in energy bills.

Meanwhile, the disruption of food supply chains, combined with record fuel costs, is driving up the price of a grocery store.

Statistics from data firm Experian Catalist show the average cost of a liter of petrol on UK forecourts on Wednesday was 168.2p.

That was up from 167.6p per liter on Tuesday. Diesel prices averaged 181.0p per liter on Wednesday, from 180.9pa the day before.

There were few signs of those pressures easing on Thursday as oil prices rose again. Brent crude rose 1.2% to $110.41 a barrel, while U.S. crude rose 0.8% to $110.48 a barrel.

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This notice was published: 2022-05-19 09:09:58

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