FTSE drops amid global sell-off after rates decisions

London’s top shares embarked on a second straight day of heavy losses on Friday as global markets fell to their lowest point for weeks.

The FTSE 100 closed down by nearly 1.3%, losing 94.05 points and closing at 7,332.12.

It came as part of a larger global sell-off, as European and US indexes all struggled amid renewed recession fears.

Michael Hewson, an analyst at CMC Markets, put part of the problems down to the European Central Bank (ECB) raising interest rates on Thursday from 1.5% to 2%.

“We’ve seen further weakness in European markets today, with the (German) Dax falling to five-week lows and the FTSE100 to four-week lows, as the fallout from yesterday’s hawkish pivot from the European Central Bank continues to ripple through the market,” he said.

“These concerns have been exacerbated by further hawkish interventions from ECB insiders doubling down on that narrative who suggest the prospect of at least another three times in a row.”

He added: “On the day, rising recession concerns prompted declines across the board after November retail sales missed expectations, with non-store retailers underperforming due to Royal Mail strikes impacting on online sales, with Black Friday not offering much of a boost.”

In Germany, the Dax index closed down 0.7%, while the Cac 40 in Paris lost 1.1% of its value.

In New York, the S&P 500 was trading down 1.6% and the Dow Jones down 1.4% around the time.

The pound lost 0.1% against the dollar and was trading at a little under 1.22 dollars.

In company news, shares in Games Workshop soared by 16% as the business announced a deal with Amazon which will see the US giant create new films and TV series out of the company’s Warhammer franchise.

The Nottingham-based company said it had “reached an agreement in principle” with Amazon.

Elsewhere, BT said that it hopes to save at least £100 million by the middle of the decade by combining two of its business units.

The global and enterprise arms of BT will come together to form BT Business, the company said. Shares in BT dropped by 1%.

The biggest risers on the FTSE 100 were Standard Chartered, up 12.2p to 616.8p, Imperial Brands, up 9p to 2,050p, BAE Systems, up 3.4p to 840.8p, British American Tobacco, up 8.5p to 3,293.5p, and Natwest Group, up 0.5p to 259p.

The biggest fallers on the FTSE 100 were Unite Group, down 43.5p to 893p, Ocado, down 30.4p to 629.6p, 3i, down 60p to 1,276.5p, Intermediate Capital Group, down 54p to 1,143.5p, and Segro, down 35p to 759.8p.