Yahoo Finance LIVE: FTSE slides amid 7% interest rate warning and UK service sector slowdown
A look at how the major markets are performing on Wednesday
The FTSE (^FTSE) and European stock markets ended Wednesday on the back foot amid news that UK services sector grew at its weakest level since March last month as rising interest rates took their toll.
London's benchmark index fell more than 1% by the close, while the CAC (^FCHI) tumbled 0.9% in Paris, and the Frankfurt DAX (^GDAXI) was also 0.8% lower.
The S&P Global/CIPS UK Services purchasing managers’ index remained in growth for a fifth straight month at 53.7, however this was down from 55.2 in May. It was the biggest month-on-month fall since last August.
The survey also showed that staffing levels expanded at the fastest pace since last September as bosses said it was easier to fill vacancies.
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It came as JPMorgan (JPM) said that it sees a risk that the Bank of England (BoE) will have to raise interest rates as high as 7% to lower runaway inflation.
Allan Monks, economist at JPMorgan, says his central forecast is that rates will peak at 5.75% by November, but there is a risk that “elevated inflation expectations could require the Bank of England to take rates up to 7%”.
Elsewhere, train companies are planning mass closures of ticket offices across England.
Most of more than 1,000 remaining ticket offices are set to be shut, while a 21 day public consultation kicks off on Wednesday. The RMT union has said it will fight the plans and has warned of further strikes.
The industry has revealed that only 12% of tickets are now sold at station kiosks, on average, compared to 85% in 1995, as people buy more tickets online or at machines.
But Mick Lynch, general secretary of the UK's largest rail union, the RMT, has previously said his union would not "meekly sit by and allow thousands of jobs to be sacrificed or see disabled and vulnerable passengers left unable to use the railways as a result".
Watch: How does inflation affect interest rates?
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