The UK’s FTSE 100 extended its early-week selloff on Wednesday after a stronger-than-expected inflation reading tempered expectations around sharp interest rate cuts this year, while underwhelming data from China hurt miners and energy majors.

The blue-chip index fell 1.3% by 0807 GMT, extending losses for a third straight session and hitting a one-and-a-half-month low.

Keeping the FTSE 100 under pressure, sterling edged up after data showed Britain’s annual rate of consumer price inflation rose for the first time in 10 months in December, with a rise in tobacco duty behind the increase.

The data dampened investors’ conviction that the Bank of England will start cutting rates in May this year.

Traders are pricing in a 50% chance the central bank will hold rates in May.

Energy and mining giants such as Shell and Glencore dipped on the back of weaker commodity prices after data showed China’s economy grew 5.2% in 2023, slightly more than the official target, but the recovery was far shakier than many analysts had expected.

UK’s FTSE 100 hits one-month low as global sentiment sours

UK-listed shares of Antofagasta slid 3.4% after the Chilean miner reported a 2% rise in 2023 copper production but left its 2024 output outlook unchanged.

Pearson slipped 1.2% even as the education company said it had met its guidance for 2023.

The midcap FTSE 250 index dropped 0.8% to hit a one-month low.