London stocks closed lower on Tuesday as Bank of England Governor Andrew Bailey cautioned that global inflationary risks remain tilted to the upside amid elevated energy prices.
The FTSE 100 index ended the session down 10.47 points, or 0.1%, closing at 10,811.66, while the FTSE 250 dropped 157.83 points, or 0.6%, to finish at 24,348.85.
Bailey and other senior Monetary Policy Committee members appeared before Parliament’s Treasury Committee to discuss interest rates, inflation, and ongoing economic pressures facing the UK.
The governor indicated that the market curve, currently pricing in three Bank of England interest rate hikes over the next 12 months, looks fair given the current risk environment.
Bailey also warned that energy prices could climb further as a result of the US-Iran war, with additional pressure stemming from the ongoing Russia-Ukraine conflict.
Oil prices rose after Iran-allied militants in Yemen attacked several energy facilities in Saudi Arabia, forcing a temporary halt to some operations at those sites.
Brent crude was quoted at 98.00 US dollars a barrel at the London equities close, up from 97.89 dollars late on Monday, having touched a session high of 99.46 dollars earlier in the day.
Computacenter (CCC.L) was the biggest faller on the FTSE 100, closing 9.0% lower at 5,165p despite surging as much as 6.8% in early trading following a strong half-year results report.
The Hatfield-based technology services provider reported that first-half profit nearly doubled and revenue jumped 72%, as the FTSE 100 newcomer benefited from increased data centre spending.
The company said growth in North America “was achieved through buoyant data centre demand, including AI-related infrastructure, as well as growth with enterprise customers across a variety of sectors.”
Computacenter shares have more than doubled over the past 12 months, making it one of the London market’s standout performers of the year so far.
Smith and Nephew fell 2.3% after launching a cash tender offer of up to 250 million dollars for bonds due in 2030, adding to the day’s negative sentiment on the index.
BP and Shell provided some support to the FTSE 100, tracking oil prices higher and climbing 0.7% and 0.5% respectively as energy stocks benefited from crude’s rise.
Miners were firmly in positive territory as copper continued to trade at exceptionally high levels, with Antofagasta climbing 4.7% and Glencore gaining 4.1%.
On the FTSE 250, Goodwin plummeted 23% after the Financial Times reported that Cerberus was nearing a £1 billion deal for the company’s defence unit.
Home furnishings retailer Dunelm fell 14% after reporting steady annual profit and a slight revenue increase, while also unveiling a three-year growth plan alongside cost-cutting ambitions.
Dunelm noted the impact of the UK’s “unusually hot weather”, which it said caused “significantly softer sales in the first six weeks of financial 2027”, with trading improving once cooler conditions arrived.
Cambridge Nutritional Sciences fell 24% after swinging to a £4.4 million pre-tax loss in the financial year ended March 31, from a £1.6 million profit the year prior.
US consumer medium-term inflation expectations edged lower in August, while the average probability that unemployment will rise climbed to its highest level since April 2020, according to the Federal Reserve Bank of New York.
Gold was quoted at 4,494.00 dollars an ounce late Tuesday, sharply higher compared to 4,412.10 dollars recorded on Monday, as investors sought safe-haven assets amid persistent inflation concerns.