Stronger pound weighs on FTSE 100 as inflation gathers steam

London's FTSE 100 fell on Wednesday as a stronger pound weighed on export-oriented retailers, while inflation jumped past the central bank's target for the second straight month as Britain is set to ease lockdowns later this month. The blue-chip FTSE 100 index dropped 0.5% with travel stocks down nearly 1.2%, while retailers Unilever, GlaxoSmithKline and Diageo were among the top drags. The domestically focussed mid-cap index fell 0.4%.

London's FTSE 100 fell on Wednesday as a stronger pound weighed on export-oriented retailers, while inflation jumped past the central bank's target for the second straight month as Britain is set to ease lockdowns later this month. The blue-chip FTSE 100 index dropped 0.5% with travel stocks down nearly 1.2%, while retailers Unilever, GlaxoSmithKline, and Diageo were among the top drags.

The domestically focussed mid-cap index fell 0.4%. British inflation rose further above the Bank of England's target in June at 2.5%, up from 2.1% in May, led by higher prices for food, fuel, second-hand cars, clothing, and footwear, official data showed.

Among stocks, AstraZeneca lost 0.9% and was the top drag on the FTSE 100 after UK's competition regulator cleared its $39 billion buyouts of U.S.-based Alexion. Barratt Developments inched 0.3% higher after it forecast 2021 profit to be marginally above the top end of market expectations on higher demand and as customers benefited from a tax holiday.