# FTSE 100 subdued as UK inflation hits double digits Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-08-17 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: UK Inflation Hits 10.1%, BoE Rate Hike Expected Meta Description: FTSE 100 muted as inflation rises, BoE may hike interest rates. Stocks react, GSK slips, Balfour Beatty jumps. Cineworld warns of lower admissions. URL: https://financedigest.com/ftse-100-subdued-as-uk-inflation-hits-double-digitshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-08-17t072018z1lynxmpei7g07mrtroptp4lse-results-1736815451795-compressed.jpg) By Sruthi Shankar and Johann M Cherian (Reuters) -UK’s FTSE 100 was muted on Wednesday after data showed inflation hit double digits for the first time in four decades, raising chances of more aggressive moves by the Bank of England (BoE) to tame surging prices. The blue-chip index slipped 0.04%, still holding near a 10-week peak. Official figures showed consumer price [inflation jumped](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") to a higher-than-expected 10.1% in July, its highest since February 1982, up from an annual rate of 9.4% in June. Traders have almost fully priced in chances of a half percentage point [rate interest hike](https://www.financedigest.com/sp-warns-of-possible-economic-blow-hit-to-japan-inc-from-boj-rate-hike.html "S&P warns of possible economic blow, hit to Japan Inc from BOJ rate hike") by the BoE in September. UK’s banking index rose 0.5%, with Barclays and Natwest [gaining about a percent as two-year government bond yield surged to its highest since](https://www.financedigest.com/dollar-heads-for-first-weekly-gain-since-february.html "Dollar heads for first weekly gain since February") 2008. In the last few weeks there has been better sentiment about the state of the economy and whether we can achieve a [soft landing](https://www.financedigest.com/stocks-dollar-gain-on-soft-landing-hopes.html "Stocks, dollar gain on soft landing hopes"), and I think that has supported financials,” said Kiran Ganesh, multi asset strategist at UBS. The banking index has rallied almost 25% since hitting the [year’s low](https://www.financedigest.com/uk-car-sales-hit-30-year-low-in-2022-but-could-grow-15-this-year-smmt.html "UK car sales hit 30-year low in 2022, but could grow 15% this year – SMMT") in March but remains 5.6% away from surpassing 2022 highs. We remain constructive on the UK market in a backdrop of high commodity prices, while many large-cap value and defensive names can perform well in the current macro environment,” said Hussain Mehdi, [investment strategist at HSBC Asset Management](https://www.financedigest.com/french-watchdog-fines-h2o-asset-management-executives-over-tennor-investments.html "French watchdog fines H2O Asset Management, executives over Tennor investments"). Drugmaker [GSK slipped 1.3% but stayed above recent lows after the plaintiff in the first lawsuit over the heartburn drug](https://www.financedigest.com/gsk-bets-2-billion-on-bellus-cough-drug-to-soothe-pipeline-fears.html "GSK bets billion on Bellus cough drug to soothe pipeline fears") Zantac scheduled to go to trial agreed to drop his case. The domestically focussed [FTSE 250 midcap index slipped](https://www.financedigest.com/ftse-100-slips-on-stronger-pound-pm-race-takes-focus.html "FTSE 100 slips on stronger pound; PM race takes focus") 0.2%, easing off two-month highs. Asos fell 8.4% as the fashion [group said its chief financial](https://www.financedigest.com/mazars-to-acquire-financial-modelling-consultancy-and-training-provider-corality-financial-group.html "Mazars to acquire financial modelling consultancy and training provider, Corality Financial Group") officer was stepping down. Infrastructure [firm Balfour Beatty jumped 8.6% after posting a 42% rise in underlying operating profit](https://www.financedigest.com/pizza-firm-dp-eurasia-delivers-profit-rise-evaluating-russian-business.html "Pizza firm DP Eurasia delivers profit rise, evaluating Russian business") in the first half and announcing a hike in dividend. Among small cap stocks, Cineworld plunged 41.3% to a record low after the world’s second-largest [cinema chain warned that admission levels at its theatres are likely to stay lower than expected until November due to limited film releases](https://www.financedigest.com/national-cinemedia-releases-first-cinema-attention-measurement-study-conducted-by-lumen-in-collaboration-with-dentsu.html "National CineMedia releases first cinema attention measurement study, conducted by Lumen in collaboration with dentsu"). (Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---