London shares inch lower as oil rally fuels inflation concerns

Business Recorder reported that London's blue-chip FTSE 100 traded 0.6 per cent lower at 10,816.59 points at 10:22 GMT on Tuesday, while the mid-cap FTSE 250 eased 0.24 per cent. Crude oil moved to multi-week peaks after Houthi attacks on Saudi Arabian energy sites lifted Brent close to $99 a barrel, dampening risk appetite across markets.

Renewed inflation worries, fed by costlier oil, have lifted bond yields to several-month peaks and made investors revisit expectations of further rate increases. According to LSEG data, traders put the odds of an American rate increase next week at 60 per cent, while the Bank of England is expected to hold steady. Data on American inflation due this week and British economic growth figures could shift those bets.

Energy shares provided some support, with BP up 1.5 per cent and Shell 0.7 per cent higher, while heavyweight banks slipped 0.8 per cent. Dunelm slid 12.5 per cent after it warned on profit for 2027, citing hot summer weather, and the retailers sector shed 0.9 per cent. Computacenter fell 3.8 per cent despite touching a record high earlier, after flagging annual profit above market forecasts.