- FTSE 100 flat, FTSE 250 down 1.4%
- Sterling hits record low
- Unilever gains after CEO retirement announcement
- Pendragon jumps on buyout offer from top shareholder
Sept 26 (Reuters) - London's mid-cap index closed at near two-year lows on Monday as investors fretted about Britain's new economic plan, but a pound at record lows and gains in consumer staples stocks helped stem falls in the bluechip index.
The mid-cap index (.FTMC) extended losses to the third straight session with real-estate and consumer stocks leading declines.
The pound came slightly off lows as traders waited to see if the Bank of England would intervene to ease concerns that the government's economic plan unveiled last week will stretch the country's finances to the limit.
"The Chancellor's generous budget giveaway may not be as useful as he makes it seem, with the Bank of England expected to combat the subsequent inflation and sterling decline by hiking faster and higher," said IG senior market analyst Joshua Mahony.
Stock markets globally have taken a hit as major central bank attempt to control surging inflation by tightening monetary policy.
The export-oriented FTSE 100 (.FTSE) was flat, having hit over six-month lows earlier in the session.
Lifting the consumer staples sector was Unilever (ULVR.L), up 1.8% after it said chief executive Alan Jope would retire at the end of 2023, announcing the move less than a year after a bungled attempt to buy GSK's consumer healthcare business. read more
Most other sectors lost ground amid recession worries.
"The worry is that not only will borrowing balloon to eye watering levels, but that the fires of inflation will be fanned further by this tax giveaway (in the government's new plan), which offers higher earners the bigger tax break," said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
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