- Global investors weary ahead rate decisions
- IMF cuts UK growth forecast
- Pets At Home eyes best day in 8 month
- FTSE 100 down 0.7%, FTSE 250 off 0.7%
Jan 31 (Reuters) - The UK's main stock indexes slipped on Tuesday, as investors braced for a series of interest rate hikes from major central banks this week, while the IMF's warning about Britain's economic outlook added to the downbeat sentiment.
The blue-chip FTSE 100 index slipped 0.7%, with economically sensitive energy, banks and mining stocks leading losses.
Britain is the only Group of Seven nation to have suffered a cut to its 2023 economic growth outlook in International Monetary Fund (IMF) forecasts published earlier in the day, adding to pressure on Finance Minister Jeremy Hunt to come up with a growth plan.
The economy looks set to shrink by 0.6% this year, a sharp downgrade from IMF's previous forecast of 0.3% growth.
Traders are betting on an 80% chance of a 50 basis point rate hike by the Bank of England on Thursday in what would be its 10th consecutive move.
"Despite the gloomy IMF forecasts, I think the Bank of England is still likely to stick to its 50 bps increase given that inflation remains in double digits," said Victoria Scholar, head of investment at Interactive Investor.
"However looking ahead, the pace of tightening looks set to slow as the Bank of England tries to balance taming inflation without inadvertently bringing about a recession."
The midcap FTSE 250 index slipped 0.7%.
Still, both the indexes were set to post sharp monthly gains, with the FTSE 100 coming close to record levels, as global stocks rallied in anticipation of smaller rate hikes by the Federal Reserve and signs of economic resilience in the United States and the euro zone.
Pets At Home jumped 10.9%, set for its best day in over eight months, after the company raised its full-year profit forecast.
Wickes Group fell 4.6%, after the home improvement retailer forecast higher energy costs in 2023.
Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich