LONDON: UK’s FTSE 100 slipped from a record high on Monday, after upbeat US labour market data raised worries that the Federal Reserve could keep hiking interest rates for longer.

The blue-chip FTSE 100 fell 0.6% after hitting a record high of 7,906.58 in the previous session. Globally, stocks wilted and government bond yields rose after upbeat economic data from the United States and other economies lessened the risk of recession, but also suggested rates might have to be hiked further.

“There is still clearly a lot of economic and geopolitical uncertainty globally, as economies are grappling with levels of inflation not seen for several decades,” Fidelity International portfolio manager Alex Wright wrote in a note.

Attractive valuation levels compared to overseas peers and the large divergence in performance between different parts of the market “create good opportunities for attractive returns from UK stocks in the next 3-5 years”, he added.

Data due later this week is expected to show the UK economy contracted by 0.3% in December on a month-on-month basis, leaving the GDP flat in the fourth quarter.

The Bank of England delivered its 10th straight interest rate hike last week, raising rates by 50 basis points to 4% - its highest level since 2008 - but signalled that it might be nearing an end to its tightening cycle.

The domestically-focussed FTSE 250 fell 0.8%, after climbing an eight-month peak last week. Hargreaves Lansdown fell 2.3% after Credit Suisse downgraded the wealth manager’s shares to “underperform” from “neutral”. Virgin Money UK and NatWest Group slipped 2.2% and 1.3%, respectively, after Barclays downgraded the banks to “equal-weight” from “overweight”.

Barcalys, however, upgraded Lloyds Banking Group to “overweight”, pointing to higher reliance on retail savings.