UK inflation smashed economist expectations to hit 11.1% in October, the highest levels since 1981.
Although there was a tepid reaction in the FTSE 100, a deeper look into how individual constituents were moving provided insight into investors’ concerns.
On a day strong results from Sage saw their shares jump 7% and investors bought into BAE Systems after a missile landed in Poland, UK-facing shares sank as the pressure on household spending increased.
At the of writing, Hargreaves Landown, IAG and JD Sports were almost neck and neck for the spot as the FTSE 100’s worst performers. Each of these companies represent a sector at risk of a deterioration in the health of the UK consumer.
JD Sports had been on a rally from lows around 90p, but today’s inflation data was a stark reminder their customers may not have as much disposable income for £170 Nike trainers in the coming months.
Indeed, savers and investors may have a little less at the end of the month to add to their HL trading accounts. AJ Bell shares were also down.
Next and Kingfisher were notable retail stocks to fall.
Housebuilders
The UK housebuilders could be considered as the ultimate barometer of perceptions of the health of the UK economy. Indeed, the sector was sold by investors on Wednesday.
Persimmon was down 2.4% while Barratt Developments, Taylor Wimpey and Berkeley were all down over 1%.