Warning by bank deflates FTSE 100

The Bank of England’s warning that the UK economy’s post-virus recovery is to take longer than previously predicted dealt a fresh blow to the FTSE 100.

It closed in the red after the central bank said UK GDP is only set to reach pre-crisis levels by the end of 2021, as traders baulked at the prospect of a drawn-out recovery.

London’s top flight closed 77.78 points lower at 6,026.794 points at the end of trading yesterday.

Europe’s other main markets opened in the black but were dragged lower as they were also weighed down by cautions over US-China trade tensions.

The German Dax decreased by 0.54%, while the French Cac moved 0.98% lower.

“London’s top flight closed 77.78 points lower”

Across the Atlantic, the Dow Jones dipped marginally on the opening bell as trade worries and increasing concern over the lack of compromise over the US’s Covid-19 stimulus package hit sentiment.

Meanwhile, sterling returned to growth as the Bank of England forecast that the economy is set to contract by 9.5% this year, while it also reduced its unemployment projections for the year.

The pound rose 0.23% versus the US dollar at 1.314 and was up 0.38% against the euro at 1.109.

The price of oil dipped after it rolled back from Wednesday’s four-month high as traders sought to cash in.

The price of a barrel of Brent crude oil decreased by 1.44% to $45.19.

The biggest risers on the FTSE 100 were Pearson, up 44p at 605p, Aviva, up 13.2p, ITV, up 2.4p at 63.3p, and Mondi, up 44.5p at 1,469.5p.

Among the biggest fallers was Glencore, down 15.86p at 180.34p.