The FTSE 100 started on the back foot after mixed trading in Asia as investors react to the potential for further rate hikes in the US.
AJ Bell investment director Russ Mould said: “Officials at the Federal Reserve are suggesting they are not yet done in their battle with rising prices. Having been slow to respond to what they believed was transient inflation in 2021, it seems central banks like the Fed are in no mood to be complacent.
“US jobs data which showed earnings rising faster than expectations on Friday will only strengthen this resolve.
“The big move higher in UK rates continues to have a dampening effect on the UK housing market. Figures from Halifax unsurprisingly showed a fourth straight month of declining prices. With mortgages becoming less affordable it is proving increasingly difficult for people to get a leg up on the property ladder or even join the ladder in the first place.
“Housebuilder Taylor Wimpey was among the top fallers on the FTSE 100 this morning. The sector faces a very different environment today after years of strong property prices, cheap mortgages and state support for first-time buyers.”