The FTSE 100 fell on rates concern on Friday with housebuilders, banks and consumer discretionary stocks among the most heavily hit.
Another day and another shift in sentiment driven by interest rate expectations. On Friday, the concerns were centred on UK interest rates and comments from the Bank of England’s chief economist.
“The higher-for-longer interest rate narrative just became louder. The Bank of England’s chief economist, Huw Pill, has said the bank won’t be quick to cut rates – even if a moderation of inflation occurs,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
“Simply put, inflation needs to be closer to the 2% target before anyone can get their hopes up that the cost of living and borrowing is about to sweep down to more palatable levels.”
Housebuilders Taylor Wimpey and Barratt Developments struggled with the prospect of higher mortgage rates for an extended period as the two fell more than 1%.
UK banks were also weaker as investors weighed how higher borrowing costs would impact the ability of their customers to repay debt.
Consumer discretionary constituents Kingfisher and JD Sports were down 2.1% and 2.7% respectively.
St James’s Place was the biggest faller following media reports the wealth manager was facing increased scrutiny from the regulator regarding charges.
