FTSE 100 Reaches One-Month Low Following Wage Data Release
(Reuters) - UK's FTSE 100 dropped to a near one-month low on Tuesday in the aftermath of strong wage data, while investors braced for clues on the Bank of England's (BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BoE) future interest-rate trajectory later this week.
The main FTSE 100 was down 0.6% as of 0950 GMT.
Supplies distributor Bunzl was the worst-hit on the FTSE 100, down 4.4%, after projecting a slight impact on its annual profit, driven by stickier-than-anticipated deflation, especially in its Continental Europe division. The losses weighed on the overall general industrial sub-index, which was down 2%.
Precious metals, energy and beverages were the other top sectoral losers, while personal goods was the top performer.
The domestically-focussed FTSE midcap 250 shed 0.5%, hitting a near three-week low, pulled down by a 7% decline in Hollywood Bowl Group after the UK's largest ten-pin bowling operator posted lower annual adjusted pre-tax profit.
On the other hand, Goodwin jumped 11% after the mechanical engineering firm posted a strong first-half pre-tax profit.
Ahead of Thursday's BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BoE policy decision, data showed British pay rose more than expected in the three months to October, prompting investors to rein in rate cut bets for next year, boosting domestic government bond yields.
The central bank is widely expected to hold rates steady this week, a day after the Federal Reserve announces its own policy decision, likely delivering a quarter-point rate cut.
"Wage growth looks strong – this will bolster the hawks' case to hold bank rate steady for longer and keep policy more restrictive," said Sanjay Raja, Deutsche Bank's chief UK economist.
"But at the same time, jobs demand is falling fast. Payrolls are shrinking. And this will eventually hit demand and medium-term price pressures."
British inflation prints on Wednesday will shed further light on the BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BoE's interest rate trajectory.
(Reporting by Ankika Biswas in Bengaluru; Editing by Sonia Cheema)