The UK’s principal stock exchanges have experienced their sharpest decline in four months, following the release of data by the Office for National Statistics indicating no economic growth in the third quarter.
Today, the combined drop of the FTSE 100 and FTSE 250 reached 1.4 percent, marking the most significant decrease since July, triggered by the announcement that the economic expansion was stagnant for the quarter ending in September.
The FTSE 250, which is more reflective of the domestic market, saw a decline of up to 2.5 percent. Meanwhile, the FTSE 100’s decrease was noted at 1.4 percent at its peak.
The downward trend in stocks was further influenced by remarks from Jerome Powell, the Federal Reserve chairman, in a recent address. He emphasized that the Fed is prepared to continue raising U.S. interest rates to combat inflation.
Investors, who had previously been buoyed by the decisions of the Federal Reserve, the Bank of England, and the European Central Bank to maintain interest rates, were rattled by these statements.
This shift in sentiment caused bond yields to rise, exerting additional pressure on the stock markets, evidenced by a 1.2 percent fall in Paris’s Cac 40 and a 0.9 percent fall in Frankfurt’s Dax.
“Powell’s seemingly hawkish stance brought the recent rally in the equity market to an abrupt end, driving up the 10-year yields and pushing equities down,” stated Joshua Mahony, the senior market analyst at Scope Markets.
