London shares slip as higher oil prices lift bond yields; BoE in focus

London shares plummeted to a two-month low on Tuesday as surging oil prices drove up global bond yields due to inflation concerns. Investors evaluated domestic economic data before the Bank of England's policy decision later in the week. The FTSE 100 index declined 0.59% to 10,634.49 points, while the FTSE 250 slipped 0.46%. Major lenders and investment banks, particularly Standard Chartered and Aberdeen, suffered the most significant losses, with declines of 1.7% and 2.6%, respectively.

Additionally, precious and industrial metal miners experienced a drop, with miners of copper and gold falling 1% and 1.7%, respectively, alongside weakening metal prices. Global bond yields spiked, with 30-year Gilts reaching their highest level since 1998 at 5.91%, as investors expected central banks to hike interest rates due to ongoing Middle East tensions and oil prices above $100.

It was reported that the Bank of England may announce its decision to stop selling 20- and 30-year gilts, potentially releasing funds for Finance Minister John Healey. Meanwhile, Britain's job market remained sluggish in the third quarter, and grocery price inflation rose to 2.3% over the four weeks ending September 6. Inflation figures are expected to be released on Wednesday.

Traders anticipate the Bank of England to maintain interest rates at its upcoming monetary policy meeting, although they expect rates to increase by at least 48.9 basis points by year-end. Wickes Group saw a surge of 10% after reporting robust third-quarter trading, propelled by mid-single-digit growth in retail like-for-like revenue.

However, online review platform Trustpilot's shares dropped 13.7% following its decision to hold its earnings outlook steady, despite strong AI-led revenues.