London stocks fall 1% on weak global growth outlook

The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

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  • Reckitt Benckiser falls as CEO Narasimhan steps down
  • August manufacturing PMI data due at 0830 GMT
  • FTSE 100 down 1.0%, FTSE 250 off 1.3%

Sept 1 (Reuters) – UK’s FTSE 100 index fell sharply on Thursday as mining stocks dragged the commodity-heavy index lower over worries interest rate hikes by central banks would dent demand, while slowing factory data from Asia further clouded global economic outlook.

The FTSE 100 slid 1.0% at 0810 GMT, extending losses for its fourth consecutive session.

“It’s partly because of the higher interest rate expectations in the U.S. wherein the Bank of England might now be forced to slow down rate hikes given Britain faces a cost-of-living standards squeeze,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

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Traders are seeing a 74% chance of the Bank of England raising interest rate by 50 basis points at its meeting in September to tamp down inflation. IRPR

Miners (.FTNMX551020) declined 3.6% as metal prices dropped on demand worries after fresh data from major global economies signalled tepid growth.

The domestically oriented FTSE 250 was down 1.3%.

Both the FTSE 100 and the FTSE 250 logged monthly declines in August as aggressive tones by central banks despite signs of economic slowdown hit risk sentiment globally.

Household expectations for average inflation over the next five to 10 years hit a record high, a monthly survey from YouGov and U.S. bank Citi showed. read more

Investor focus was on manufacturing data for August due at 8:30 GMT for further clues on strength of the British economy.

Reckitt Benckiser (RKT.L) fell 4.3% after the company said its Chief Executive Officer Laxman Narasimhan will step down at the end of September. read more

“It’s kind of a double whammy of uncertainty about what’s ahead given that he was three years at the company and at a time when market conditions are tougher especially for companies of the likes of Reckitt Benckiser which are highly reliant on consumer spending,” added Streeter.

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Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Krishna Chandra Eluri

Our Standards: The Thomson Reuters Trust Principles.

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