Economics / Markets

The FTSE 100 closed 1.8% lower on Wednesday, though slightly above earlier lows, as shares in retailers, banks and housebuilder Persimmon fell.

Over a third (36pc) of the FTSE-100's market capitalisation is now comprised of commodity related companies, up from 26pc last year, according to DigitalLook.com.

London markets have started poorly this morning as a host of downgrades punished blue chip stocks in early trading. The FTSE100 is currently 43.40 points (0.74%) lower to 5818.50.

The FTSE 100 rose 1.1% on Tuesday, adding 67.34 points to close at 5,861.9, boosted by such major miners as Eurasian Natural Resources , which led the gainers with a 6.2% gain, Lonmin , up 4.4%, and Anglo American , 4% higher.

The rate of inflation rose further in May, according to the Office for National Statistics (ONS).

Traders had been expecting the consumer price index to leap above 3% in May and didn't respond noticeably to this morning's news that it actually touched 3.3%, more than 1% above the government's target.

In London, markets slipped slightly, with the FTSE 100 closing down 8.2 points (0.14%) to 5,794.6.

The FTSE100 has opened in positive territory this morning as Barclays dominates the news early Monday. The blue chip index is currently 10.30 points (0.18%) higher to 5813.10.

In London, markets climbed as some banking stocks recovered from a tough week, and the FTSE 100 closed up 12.3 points (0.21%) to 5,802.8.

The outlook for the UK "will get worse, before it gets better," according to Jamie Hooper, manager of AXA Framlington UK Growth fund.