A bleak warning from Chancellor Jeremy Hunt about ‘a tough road ahead’ for the UK economy put a downer on the domestic-focused FTSE 250 index, knocking it by 0.4% on Monday and casting a dark cloud on consumer-facing companies.
Russ Mould, investment director at AJ Bell, said: “Retailers and travel businesses were among the biggest fallers as investors fretted about how much their goods and services would be bought by the public over the coming months if times are going to get even bleaker.
“Royal Mail is struggling under the weight of repeat labour strikes and investors are increasingly getting tired of waiting for aresolution and are voting with their feet. The shares in its parent company International Distributions Services dived another 4.5%, meaning they are now down 61% year-to-date. The arrival of snow across parts of the UK will only add to the company’s problems as deliveries might be delayed.
“The FTSE 100 dipped 0.3% to 7,454 thanks to weakness across the mining, retail and property sectors. Brent Crude oil fell 0.6% to $75.65 per barrel.”