Inflation figures hit FTSE

Property firms continued to suffer today after yesterday’s higher-than-expected inflation figures led to fears of higher borrowing costs.

The sector dragged on the FTSE 100 Index, which was 28.8 points lower at 6469 by mid-morning, as the strong pound also impacted on manufacturers and companies with strong US-facing businesses.

Hammerson led the real estate sector decline for the second successive session, down 39p to 1582p, with Land Securities off 43p to 2055p and Slough Estates falling 13.5p to 751.5p.

British Land lost 34p to 1486p as it also took a hit from declaring itself ex-dividend – meaning shareholders are not entitled to the next payout.

The fall was mirrored by a host of other stocks, with BAE Systems topping the fallers’ board with a loss of 11.5p to 453.5p, Legal & General down 3.4p to 160.4p and Rolls-Royce off 9p at 488.25p.

On the plus side, pharmaceuticals firm AstraZeneca was ahead 9p at 837p after a share buy back, while pub group Punch Taverns enjoyed a bright start on its first day in the top flight, with shares rising 4p to 1293p.

Retailers continued to slip amid concerns that a rise in interest rates would hit consumer spending on the high street, with B&Q owner Kingfisher down 5.5p to 260.25p, Next off 28p at 2225p, and Argos firm Home Retail Group dipping 6.75p to 434.75p.

However, Tesco moved in the opposite direction as it benefited from a raft of broker notes following its strong results in the previous session. The stock was ahead 1p at 462.75p.

Elsewhere, EMI shareholders shook off the music group’s announcement that it would not make dividend payments during its restructuring. With EMI forecasting earnings ahead of revised expectations, shares in the troubled group were up 122.75p at 228p, a gain of 6%.