FTSE 100 opens down as Bunlz slumps on profit warning; wage rises threaten rate cuts - Market Report

London's FTSE 100 opened sharply lower with Bunzl leading the fallers on a cautious trading update.

London’s premier index shed 50 points at 8,211 as the plastics distributor dropped more than 5% on a warning that profits are being hit by stickier-than-expected price deflation. Revenues on an actual basis will also be lower this year, said the FTSE 100 group.

Hopes that interest rates will fall rapidly also took a dent as wages in the UK rose for the first time in a year. Unemployment stayed steady at 4.3%, but wages including bonuses were up by 5.2%.

UK inflation figures are due tomorrow, while the Bank of England is expected to keep interest rates at 4.75% when its policy meeting concludes on Thursday.

Oil groups were also a drag on the index, with BP and Shell down by 1.4% and 1.8% respectively as the price of Brent flirted with the US$73 a barrel mark

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