Negative rate chatter drags main lenders

The UK’S biggest high-street lenders pulled markets lower after they were hit by talk of possible negative interest rates.

Nat west, Barclays, HSBC and Lloyds were all in the red as the day ended, dropping between 1.2 per cent and 3 per cent.

The Bank of England may have held off on making any changes to interest rates, but just the talk of negative rates was enough to spark a slide for the banks, said Michael Hewson, an analyst at CMC Markets. The news sent Natwest’s shares to their lowest point in four months.

The struggling banks help ed push the FTSE 100 down by half a per cent to 6,049.92 points, a drop of 28.56.

On the other side of the pond, a similar story played out, as action – or perhaps the lack of it – by the Federal Reserve on Wednesday left traders unimpressed.

In company news, retailers managed to offset some of the FTSE’S retreat, with Next, Sainsbury and Ocado top of the pile.

Next was first after the news that its profits will be vastly ahead of previous expectations.

The clothes retailer now expects to make around £300 million before tax this year – £105m more than it had predicted just two months ago. Shares jumped 4.2 per cent to 6,426p.

As Office for National Statistics data showed that nearly two thirds of adults are now travelling to work, the highest proportion in months, ticket sales app Trainline revealed that it expects to report up to lose up to £19m in the six months to 31 August as sales slumped.

But investors were not put off, and encouraged by better trading in the second quarter they sent Trainline’s shares up by 5.7 per cent to 406.8p.

Shareholders fired a warning shot across Ryanair boss Michael O’leary’s desk when fewer than t wo thirds voted for his pay packet, worried over his nearly €500,000 (£458,000) bonus at a time when the airline is struggling with reduced demand.

But on the markets they were kinder to the Irishman, sending the shares in Ryanair up by 1.1 per cent to 12.6p.

Carnival’s shares were flat at 1,029p after its subsidiary P&O Cruises cancelled all cruises until Januar y, a two-month extension.