...By Lola Smith for TDPel Media.
On Wednesday, the FTSE 100 closed down 0.3% as some of the UK’s largest supermarkets underperformed.
Tesco, Ocado, and Sainsbury’s were among the worst performers on the index.
This comes ahead of the Bank of England’s decision on interest rates on Thursday.
Decision makers on the Monetary Policy Committee (MPC) are widely expected to hike rates again, for what would be the 12th time.
It could be the last time they raise rates, most likely from 4.25% to 4.5%.
However, some predict that there could be another hike in the future to help control still-high levels of inflation.
Market Performance and Company News
National Express decided to change its name, the boss of Wetherspoons lashed out at politicians, and Capita said that a recent cyberattack would cost it £20 million.
European markets fared slightly worse than London’s FTSE 100 on Wednesday, with the German Dax index down 0.4%, and France’s Cac 40 dropping 0.5%.
The US markets had mixed results, with the S&P 500 up 0.2% and the Dow Jones gaining 0.3%.
In company news, Asos announced a major half-year loss, causing shares to plummet by 22%.
Losses for the online retailer ballooned from less than £16 million a year ago to over £290 million in the first six months of the financial year.
Shares in Tui also fell despite the travel group reporting a one billion euro surge in revenue to £2.7 billion in the first quarter, with shares down 3.2%.
Capita’s shares reduced in value by 3.6% as it revealed that the cost of last month’s cyberattack could reach between £15 million and £20 million.
Pub chain Wetherspoons reported a 12.2% increase in like-for-like sales in the three months to the end of April, with shares rising 5%.
Analysis and Commentaries
As markets hold their breath in anticipation of the Bank of England’s decision on interest rates, the FTSE 100 closed down on Wednesday, with some of the UK’s largest supermarkets being among the worst performers on the index.
The MPC’s decision is expected to be the last time they raise rates, but some predict that there could be another hike in the future to control still-high levels of inflation.
Asos’ major half-year loss and subsequent plummeting shares show the impact of the pandemic on online retailers, as consumers shift their focus to in-person shopping.
Tui’s surge in revenue reflects the potential for recovery in the travel industry, but Capita cyberattack and subsequent losses highlight the importance of cybersecurity in an increasingly digital world.
Overall, the markets remain cautious as they await the outcome of the Bank of England’s decision on interest rates, with uncertainty surrounding the future of the economy and the impact of inflation.
