FTSE 100 dips after weak data highlights recession risks

  • UK PMI falls at fastest rate in two years
  • Senior jump after bright prediction
  • FTSE 100 down 0.4%, FTSE 250 up 0.3%

Jan 24 (Reuters) – Britain’s blue chip index fell on Tuesday, boosting health care stocks after data showed Britain’s private sector economic activity fell at its fastest pace in two years in January. and commodity stocks fell.

The FTSE 100 (.FTSE) fell 0.4%, with pharmaceutical company AstraZeneca (AZN.L) and mining company Glencore (GLEN.L) the biggest drags on the index.

The S&P Global/CIPS Flash Composite Purchasing Managers Index (PMI) fell to 47.8 in January from the lowest economist forecast of 49.0 in December. slow down.

Separately, data showed the UK government borrowed more money last month than in any December since monthly records began 30 years ago. This reflects the huge cost of energy support and the high debt interest rates associated with rising inflation.

“It’s been a difficult morning for the UK, data-wise, with higher-than-expected borrowings highlighting tight government fiscal constraints,” said Stuart Cole, chief macroeconomist at Equity Capital.

“Equally disappointing PMI figures show production is declining at its fastest pace in nearly two years, and we think the UK economy is headed for a recession, if not already. It will raise concerns about

Market participants are pricing in a 70% chance that the Bank of England will raise rates by 50 basis points next week.

Rate hikes are expected to continue as the US Federal Reserve (Fed) and European Central Bank (ECB) announce monetary policy decisions next week.

Senior (SNR.L) jumped 10.4% after the aerospace firm said it expects better-than-expected adjusted earnings in 2022, boosting the FTSE 250 Mid-Cap (.FTMC) by 0.3%.

Associated British Foods (ABF.L) fell 1.6% after the group warned that economic headwinds could slow consumer spending in 2023.

Marstons (MARS.L) jumped 7.2% after pub groups posted year-end sales above pre-pandemic levels.

Reported by Shashwat Chauhan, Bangalore. Edited by Rashmi Aich and Krishna Chandra Eluri

Our standards: Thomson Reuters Trust Principles.

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