FTSE 100 drops as surging inflation fuels rate hike bets

London's FTSE 100 dropped on Wednesday as a rise in consumer prices to 30-year highs further bolstered bets for rate hikes, while Burberry topped the index after strong quarterly sales. Burberry gained 4.4% after the luxury brand said its annual profit will beat market expectations as the company's full-price sales accelerated in the third quarter.

London's FTSE 100 dropped on Wednesday as a rise in consumer prices to 30-year highs further bolstered bets for rate hikes, while Burberry topped the index after strong quarterly sales. British consumer price inflation rose more than expected to 5.4% in December, official data showed, adding pressure on the Bank of England to raise interest rates again next month.

The blue-chip FTSE 100 index fell 0.2% with consumer-focussed stocks Diageo and Unilever the top drags on the index. The domestically focussed mid-cap index dropped 0.5%.

Pub group JD Wetherspoon fell 1.3% after it said it would record a loss for the first half of the fiscal year due to pandemic-related curbs. Burberry gained 4.4% after the luxury brand said its annual profit will beat market expectations as the company's full-price sales accelerated in the third quarter.