Economic news

FTSE 100 Slides into Red as Ocado Weighs

  • FTSE 100 down 0.1%, FTSE 250 off 0.05%
  • Wage growth rises unexpectedly
  • Revolution Bars Group slumps
  • FTSE 100 hovers over 4-1/2-year high

Jan 17 (Reuters) - UK's blue-chip FTSE 100 edged lower on Tuesday, snapping a four-day winning streak, as Ocado sank on grim Christmas sales at its online supermarket venture, while data showing rising pay growth fuelled fears about the Bank of England (BoE) keeping monetary policy tight.

The blue-chip FTSE 100 fell 0.1%, while the domestically-oriented FTSE 250 shed 0.05%.

Shares of retailer Ocado Group tumbled 5.5% after its online supermarket joint venture with Marks & Spencer, Ocado Retail, said customers purchased fewer items per order in the run-up to Christmas.

This saw the personal care, drug and grocery index lose 0.9%, making it the worst performing sector.

Meanwhile, data showed pay, including bonuses, saw its biggest increase since 2001 in the UK.

"November's labour market data showed that conditions remained tight and wage growth stayed strong. This will add further weight to the case for the BoE to raise interest rates," said Ashley Webb, UK economist at Capital Economics.

The labour data raises anticipation for UK's consumer inflation due on Wednesday.

In 2022, UK's mid-cap index – that better reflects the UK economy than its blue-chip peer – fell the most since the global financial crisis as the BoE raised interest rates to its highest since 2008 to tame inflation.

"Consumers are continuing to look for credit on good terms to keep spending... There certainly is a worry about how long that spending trend can continue and that's especially true if conditions for consumer's real wealth worsen over the next few quarters," said Matt Britzman, equity analyst at Hargreaves Lansdown.

Also among stocks, Revolution Bars Group slumped 27% after it forecast its annual core profit at the bottom-end of market expectations as the city-centre pub chain's Christmas sales were hit by train strikes.

Reporting by Johann M Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty and Shailesh Kuber

Source: Reuters

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