(Reuters) – UK’s main stock indexes fell on Monday as investors were on the edge ahead of the announcement of the country’s new prime minister at a time when Britain faces a cost of living crisis, industrial unrest and a recession.
The benchmark FTSE 100 fell 0.7% and the domestically oriented FTSE 250 shed 0.8% at 7:01 GMT.
Both the major UK indexes declined more than 1% last week on fears around surging prices, a looming economic slowdown and the policy direction under the new prime minister.
Liz Truss is expected to be named leader of the governing Conservative Party and Britain’s next prime minister at 1130 GMT.
Some investors are alarmed that tax cuts promised by Truss could aggravate Britain’s inflation problem, speeding up the Bank of England’s interest rate hikes and worsening a recession that the BoE expects to start this year and end only in 2024.
The rate-sensitive banking sector declined 1%.
The pound fell for its seventh straight session and remained close to its pandemic trough.
Oil majors Shell and BP eked out slim gains tracking firm crude prices as investors eyed possible moves by OPEC+ producers to cut output and support prices at a meeting later in the day. [O/R]
(Reporting by Johann M Cherian in Bengaluru; Editing by Maju Samuel)
