London shares close lower after OECD warns UK economic growth will slow
The FTSE 100 ended the day down 5.93 points, or 0.08%, at 7,593, after recovering some ground later in the day.
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Your support makes all the difference.London’s top shares finished the day in negative territory after experts warned UK economic growth could grind to a halt next year.
Trading sentiment took a downturn after the Organisation for Economic Co-operation and Development (OECD) said growth will slow more than expected over the rest of this year before flatlining in 2023.
Other European markets also slid after the body warned global growth would stall further following the impact of Russia’s invasion of Ukraine.
The FTSE 100 ended the day down 5.93 points, or 0.08%, at 7,593, after recovering some ground later in the day.
The German Dax decreased by 0.8% by the end of the session while the French Cac fell 0.94%.
Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been another day of weakness for markets in Europe after the OECD followed up Tuesday’s World Bank global growth downgrade with one of its own.
“This really shouldn’t have come as too much of a surprise, however markets in general tend to view the world through a rather rose-tinted prism, which is largely detached from the experiences of ordinary people on the ground.
“To have the risks to the global economy, particularly in Europe as well as the UK, spelt out so starkly, seems to have prompted increased anxiety amongst investors, sending yields higher and equity markets lower.”
US stocks were also dented by the gloomy economic outlook, stepping backwards after two previous sessions of gains.
Meanwhile, sterling was treading water after the OECD also raised concerns over elevated inflation levels in the UK and worker shortages.
The pound was flat against the dollar at 1.255 and dropped 0.06% against the euro to 1.168.
In company news, manufacturing firm Melrose Industries was one of the top performers after it unveiled plans to launch a £500 million share buyback programme.
The announcement came two days after it revealed plans to sell its Ergotron business to private equity firm Sterling Group for £520 million.
Shares increased by 15.6p to 157.7p as a result.
Wizz Air tumbled after the European airliner warned that ticket prices might jump by close to 10% this summer as it faces more losses at the start of the season.
Wizz told shareholders that recent disruption at airports will probably lead to the airline making an operating loss in the first quarter of its financial year. Its stock fell by 261p to 2,499p.
City Pub Group made gains after the London-based pub owner said it was boosted by a “particularly strong” jubilee weekend as sales rebounded beyond expectations.
The company closed 3p higher at 96.5p on Wednesday.
The price of oil moved towards the highs seen last week as comments from the UAE oil minister that prices are not near their peak helped drive another increase.
Brent crude increased by 1.68% to 122.6 US dollars per barrel when the London markets closed.
The biggest risers in the FTSE 100 were Melrose, up 15.6p at 157.7p, Aveva, up 238p at 2,468p, Scottish Mortgage Investment Trust, up 39.2p at 815.8p, Ocado, up 31.8p at 952.6p, and JD Sports, up 3.8p at 122.25p.
The biggest fallers were Airtel Africa, down 12.6p at 144p, Royal Mail, down 15.9p at 291.4p, Schroders, down 94p at 2,818p, Abrdn, down 4.75p at 186.5p, and Rentokil, down 11p at 497p.