# UK stocks slip as rate hike worries grip investors
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-06
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: FTSE 100 Falls 0.8% on US Economic Data Fears
Meta Description: FTSE 100 falls after upbeat U.S. data sparks tightening fears, with BoE official warning rates must stay higher for longer. Sectors down, miners up.
URL: https://financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investorshtml

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By Sruthi Shankar and Shashwat Chauhan

(Reuters) – The UK’s FTSE 100 closed lower on Monday, as upbeat U.S. economic data last week sparked [fears of further monetary tightening and as a top Bank](https://www.financedigest.com/instant-view-ecb-sticks-with-big-rate-hike-even-as-bank-fears-roil-markets.html "Instant View: ECB sticks with big rate hike even as bank fears roil markets") of England (BoE) official voiced concerns that rates need to stay higher for longer.

The blue-chip [FTSE 100 fell 0.8% after briefly hitting a new record](https://www.financedigest.com/londons-ftse-100-hits-fresh-record-high-as-telecoms-surge.html "London’s FTSE 100 hits fresh record high as telecoms surge") high in the previous session, while the domestically-focused FTSE 250 recorded a near 1% drop after climbing to an eight-month peak last week.

Nearly all major sectors finished in the red, but [precious metal](https://www.financedigest.com/u-s-money-reserve-reviews-real-talk-about-diversifying-with-precious-metals.html "U.S. Money Reserve Reviews: Real Talk About Diversifying With Precious Metals") miners eked out a meagre rise of 0.7%.

China-exposed [financial services](https://www.financedigest.com/devops-the-secret-tool-thats-transforming-financial-services.html "DevOps: The Secret Tool that’s Transforming Financial Services") firm Prudential fell nearly 5% on concerns around elevated Sino-U.S. geopolitical tensions.

Globally, stocks wilted and government bond yields rose after last week’s upbeat [economic data from the United States and other economies lessened the risk of recession](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc"), but also suggested rates might have to be hiked further.

Markets are [pricing some cuts](https://www.financedigest.com/tesla-cuts-u-s-model-s-and-model-x-prices-between-4-and-9.html "Tesla cuts U.S. Model S and Model X prices between 4% and 9%") this year and I think that is not going to work, that’s not going to be what transpires, so there is room for downside from here for equities,” said Vivek Paul, UK chief investment strategist at BlackRock Investment Institute.

BoE rate-setter Catherine Mann backed further increases in interest rates and warned that pausing [risked a confusing “policy boogie” if it turned out rates would need to rise](https://www.financedigest.com/stocks-rise-after-bank-sale-fuels-investor-risk-appetite.html "Stocks rise after bank sale fuels investor risk appetite") again.

The Bank of England delivered its 10th straight interest rate hike last week and signalled the [tide was turning](https://www.financedigest.com/is-the-tide-turning-for-chinese-brands-overseas.html "IS THE TIDE TURNING FOR CHINESE BRANDS OVERSEAS?") in its battle against high inflation.

Data on Monday showed Britain’s construction sector had its worst month in almost three [years in January as rising borrowing costs](https://www.financedigest.com/commonenergy-mistakes-costing-homeowners-hundreds-of-pounds-each-year.html "Commonenergy mistakes costing homeowners hundreds of pounds each year") hit house-building hard.

Looking ahead, the week houses some big corporate earnings, including oil major BP, drugmaker AstraZeneca and [consumer goods maker](https://www.financedigest.com/lights-maker-signify-cuts-annual-outlook-on-lower-consumer-demand-china-woes.html "Lights maker Signify cuts annual outlook on lower consumer demand, China woes") Unilever.

Among individual stocks, Hargreaves Lansdown fell 3.3% after Credit Suisse downgraded the [wealth manager’s](https://www.financedigest.com/wealth-management-consultant.html "Wealth management consultant") shares to “underperform” from “neutral.

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich and Sharon Singleton)


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