FTSE now down 2%
The FTSE 100’s fall continued, with London’s blue-chip index now down by 2.1% today.
The index could fall below 7600, in what looks set to be its sharpest daily fall since worries about Credit Suisse sent shockwaves through the European banking sector more than two months ago.
US shares fall further
US shares fell further this morning after steep declines yesterday, as investors continue to worry about the possibility of a default.
The S&P 500 is down 0.6% to 4119, while the Dow Jones is also down 0.6%, to 32870 and the Nasdaq down by the same amount, to 12486.
Netflix is among the biggest risers, as it rolls out its anti-password-sharing policies across the globe. Regional banks Lincoln National and Comerica are among the biggest fallers.
“Recession has been delayed rather than cancelled”
A number of major institutions have said they expect the UK to avoid a recession, but Capital Economics’ Paul Dales and Neil Shearing warned that the stickiness of inflation shown in today’s figures mmeans the country may not be able to do so.
“It is striking that the Bank, the OBR and the IMF all now expect that the UK will avoid a recession,” they said. “We are not convinced.
“The latest data make clear that inflation is being driven increasingly by rapid wage growth that is manifesting itself in domestic services prices. Policymakers will need to bear down on demand in order to cool the labour market and bring inflation down to more acceptable levels. Generating sufficient economic slack without creating a recession will be extremely difficult.
“We suspect it is more a case that a recession has been delayed rather than cancelled.”
Bailey: ‘I don’t think spiral is the right word’
Bank of England governor Andrew Bailey rejected suggestions of a ‘wage-price spiral’, despite particularly high services inflation prompting some economists to warn that one may be starting to form.
Speaking at a Wall Street Journal event, he said: “I don’t think spiral is the right word”.
Bailey also noted that the majority of the Bank’s recent rate rises have not been fully fed through to the economy yet. Amid today’s surprisingly high inflation reading, he noted that the Bank had said in May that the UK appeared on course to fulfil the Government’s goal of halving inflation by the year’s end. However, he said he couldn’t speculate on whether today’s figures would change those projections.
US futures down on default fears
Shares in US companies are set to open lower today, as the expected deadline before the country risks defaulting on its debt gets ever-closer.
Dow Jones futures are down 0.4% to 33022, while S&P 500 futures are down 0.5% to 4139. Nasdaq futures, containing many of the most rate-sensitive stocks, are down 0.6% to 13641.
London crowned the ‘founder factory of Europe’ in new report
London’s tech unicorns generate the highest number of startup spinouts in Europe, new data shows, in signs the capital’s biggest firms are laying the groundwork for the UK’s long-term success in the sector.
As many as 185 startup spinouts have been created from 27 London unicorns, according to a report released today by venture capital firm Accel, 20 more than that produced in Berlin and nearly 50 more than the number made in Paris.
Fintech Revolut tops the London list with 26 spinouts, followed by takeaway app Deliveroo with 24 spinouts and money transfer service Wise with 22.
Accel partner Harry Nelis told the Standard: “For every big company now you can create the seeds of seven other companies. That is a flywheel that should both sustain the ecosystem but should grow it as well.
“We’re at a point where the european ecosystem now has the same benefits that Silicon Salley has had for decades.”
‘The stakes are getting increasingly high’
Commenting on falling inflation but the potential risk of further central bank policy failure, Charles White Thomson, CEO at Saxo UK, said: “The status quo in the UK is increasingly painful and uninspiring – this should not be about celebrating falling inflation or the avoidance of a technical recession.
“The UK continues to underperform its key counterparties and have underserved the majority and their aspirations. We are now in an economic danger zone, pincered between public enemy number one/ inflation, a 19% increase in food and non-alcoholic beverages which reaffirms the cost of living crisis, and a consumer saddled with outsized debt that was once cheap.
“The risk for further policy failure is real and the stakes are getting increasingly high.”
Deal signed for London’s first UFC Gym to open in 2023
Workers and residents near Old Street station will soon have a new place to do kickboxing, Jiu-jitsu and other classes, with a deal just inked for London to get its first UFC Gym.
It is a brand extension of UFC, the world-famous mixed martial arts organisation, and this 7,500 square feet site marks its third UFC Gym in the UK.
Since debuting in 2009, UFC Gym has opened more than 170 locations
Candy shop landlords ‘shamed’ after council letter calling for action
Oxford Street landlords have been urged to do “all that you can” to throw out American candy stores from their properties.
The leader of Labour-led Westminster council Adam Hug has written to 19 freeholders and long leaseholders of premises where a US candy store, vape store or souvenir shop operates and has “named and shamed” owners that did not respond.
Key data as FTSE falls by 1.8% in morning
The FTSE 100 has lost almost 150 points this morning, with almost every company falling.
Gilt yields have also risen, amid fears that interest rates could reach as high as 5.5%.
Click through the graphs to see how markets have moved as of lunchtime.
