FTSE 100 sees £47bn wiped off value as inflation fears prompt global markets plunge

May 13, 2021

Britain’s leading share index has plunged sharply into the red for the second time this week as inflation fears grip global stock markets.

The FTSE 100 fell by more than 170 points, or about 2.5%, in early trading – wiping around £47bn off the combined value of its constituent companies.

Similar falls were seen across Europe, taking their cue from a major sell-off on Wall Street on Wednesday which extended to Asian markets overnight.

That followed figures showing a bigger than expected slump in US inflation, which investors fear could put pressure on America’s central bank, the Federal Reserve, to lift ultra-low interest rates.

In London, heavyweight fallers included mining giants Anglo American and Rio Tinto and oil majors Shell and BP.

Burberry, the luxury fashion group, was the biggest loser with a drop of 8% following the publication of its annual results while BT – which also published its full-year figures on Thursday – slipped 4%.

Russ Mould, investment director at AJ Bell, said: “Yesterday’s US inflation shock fuelled the growing belief that central banks will have to take action sooner rather than later when it comes to raising interest rates.

“The world wanted economic recovery, but it appears to be happening too fast and the actions required to cool it down aren’t favourable to stock markets.”

The latest sell-off added to a slump seen earlier this week which was in part prompted by Chinese data showing a higher than expected increase in factory gate prices – seen as another inflation warning light.

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