UK stocks suffer sharpest fall in four months as economy flatlines

Britain’s biggest stock markets have suffered their largest fall in three months after official figures showed the economy flatlined in the third quarter.

​Britain’s biggest stock markets have suffered their largest fall in three months after official figures showed the economy flatlined in the third quarter. 

Britain’s biggest stock markets have suffered their largest fall in three months after official figures showed the economy flatlined in the third quarter.

The FTSE 100 fell 1.28pc, the largest drop since August, while the FTSE 250 dropped 1.02pc, after the Office for National Statistics revealed growth stood at 0pc in the three months to September.

During trading, the domestically-focused FTSE 250 alone dropped as much as 2.5pc. The FTSE 100 was down as much as 1.82pc.

Stocks were also impacted by a speech from Federal Reserve chairman Jerome Powell on Thursday, where he warned the central bank “will not hesitate” to increase US interest rates further in its quest to bring down inflation.

The statements have spooked investors who had been encouraged by decisions by the Fed, the Bank of England and the European Central Bank to keep interest rates on hold in recent months.

The comments sent bond yields higher, putting pressure on stock markets, with the Cac 40 in Paris down 1.2pc and the Dax in Frankfurt down 0.9pc.

Joshua Mahony, chief market analyst at Scope Markets, said: “Powell helped bring the equity market resurgence to a grinding halt, with his apparent hawkish tone sending the 10-year yields higher and equities lower.”

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