Leading UK shares remained firmly in the red by midday on Thursday after the US Federal Reserve opened the door to earlier than expected interest rate rises and an easing of monetary support against a backdrop of rising inflation expectations.

All eyes were on the US central bank as it brought forward the timeline to begin tightening interest rates, with two hikes now forecast in 2023.

AJ Bell financial analyst Danni Hewson said it was a reminder that investors will ‘eventually have to confront the reality that the current ultra-loose monetary policy won’t last forever’.

By 12pm, the UK’s benchmark FTSE 100 index sunk 0.57% to 7,141.31, while the midcap FTSE 250 index fell 0.5% to 22,505.50.


On a busy day for company news, Premier Inn owner Whitbread (WTB) was marked up 2.75% to £33.80 on news occupancy levels surged nearly 50% in the first two weeks of May, as the UK government eased travel restrictions and limits on overnight stays.

‘Trading in the UK since May 17, when overnight leisure stays were permitted, and when our restaurants fully reopened for indoor service, has been encouraging,’ enthused CEO Alison Brittain.

‘Additionally, our forward bookings continue to improve, benefiting from the anticipated post-lockdown bounce in leisure demand, and a continued gradual improvement in business bookings.’


In the retail sector, iconic footwear brand Dr. Martens (DOCS) dropped 7% to 460.2p after reporting a 30% drop in pre-tax profit to £71 million for the year to March 2021, one struck after exceptional costs related to its initial public offering (IPO) and with retail revenue impacted by the pandemic.

Nevertheless, the British boot maker said it will start paying a dividend in the current financial year and left guidance given at the time of its IPO unchanged, with the company confident it can deliver high teens revenue growth this year as its laps last year’s Covid-clobbered comparatives.

And car parts-to-bicycles seller Halfords (HFD) gained 4.3% to 423.4p after posting impressive full year results driven by market share gains in cycling and motoring services, with underlying pre-tax profits up 72.3% to £96.3 million.

Positive momentum has carried forward into the first nine weeks of the new financial year, although Halfords warned of ‘acute’ supply chain challenges in cycling, said motoring price cuts may crimp gross margin and issued a cautious outlook for the current year.

Halfords is now targeting pre-tax profits of ‘above £75 million’ this year, though it will accelerate investment in its transformation and management is ‘conscious of continued Covid-19 volatility’.


Elsewhere, thermal energy management and niche pumping specialist Spirax-Sarco Engineering (SPX) slid 2.2% lower to £132.90 as it launched its refreshed sustainability strategy and announced new targets designed to accelerate sustainability performance.

Trainline (TRN) gained 2.6% to 278.2p as it reported a surge in net ticket sales for the first quarter of financial year 2022, up 324%, the highest level since the start of the pandemic.

Cyber security and resilience advisor NCC (NCC) nudged 0.9% higher to 286p as it forecast higher revenue growth and increased global costs from inflationary pressures for the current financial year.

Infrastructure and services provider Fulcrum Utility Services (FCRM:AIM) firmed 1.5% to 33.5p after winning a £5.5 million contract to deliver electricity, gas and water infrastructure for Greencoat Capital’s greenhouse near Ely, Cambridgeshire.


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Issue Date: 17 Jun 2021