Business
FTSE 100 jumps on mining boost, Burberry’s strong forecast
Published by maria gbaf
Posted on January 20, 2022
2 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by maria gbaf
Posted on January 20, 2022
2 min readLast updated: January 28, 2026
FTSE 100 rises 0.4% on mining gains and Burberry's forecast. UK inflation at 5.4% pressures BoE on rates. Bond yields reach March 2019 highs.
By Shashank Nayar
(Reuters) -London’s FTSE 100 ended higher on Wednesday, aided by gains in miners and consumer staples, with strong profit forecasts from luxury brand Burberry and education group Pearson providing a further fillip to sentiment.
After falling as much as 0.5%%, the blue-chip FTSE 100 index reversed course to end 0.4% higher, with major miners and consumer companies such as DIAGEO-DIVESTITURE-af84b6c0-60a9-429f-9942-1385ea2cae81>Diageo and Unilever among top gainers.
British consumer price inflation rose more than expected to 5.4% in December, official data showed, adding pressure on the Bank of England (BoE) to raise interest rates again next month.
“The view that the current high readings are transitory is starting to sound a bit hollow,” said Alan Custis, managing director at Lazard Asset Management. “We would expect inflation to peak nearer 7% in 2022, which will keep the pressure on the BoE to continue increasing interest rates.”
Signs of inflationary pressures and labour market strength drove investors to ramp up rate hike bets, pushing the UK’s benchmark bond yield to its highest since March 2019, while shorter-duration yield touched October 2018 highs.
Meanwhile, BoE Governor Andrew Bailey said that he was concerned inflation pressures might prove longer-lasting than previously forecast, citing surging energy costs and signs that cost pressures are feeding into wage demands.
Burberry gained 6.3% after the luxury brand said its annual profit would beat market expectations as the company’s full-price sales accelerated in the third quarter.
Pearson gained 4.4% after it raised its forecast for full-year adjusted operating profit in a boost to management efforts to restructure the business.
Meanwhile, Unilever PLC gained 4.5% after the Dove soap maker said on Wednesday it would not increase its 50-billion-pound ($68 billion) proposal to buy GSK’s consumer healthcare business.
The domestically focussed mid-cap index was 0.0 flat, with WH Smith Plc jumping 7.1% on expectations of a resumption in the recovery of its travel markets even as the retailer said it was experiencing a “small impact” from the Omicron coronavirus variant.
(Reporting by Shashank Nayar and Amal S in Bengaluru; Editing by Shounak Dasgupta, Subhranshu Sahu, William Maclean)
The article discusses the rise of the FTSE 100 index driven by mining stocks and Burberry's strong profit forecast amid rising UK inflation.
Burberry's announcement of better-than-expected profits boosted investor sentiment, contributing to the FTSE 100's rise.
Rising UK inflation at 5.4% increases pressure on the Bank of England to raise interest rates, affecting bond yields and market expectations.
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