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UK shares fell more than 1% on Wednesday after the country’s inflation accelerated to a 40-year-high, adding further pressure on the Bank of England to raise interest rates, while falling crude and metals prices sent commodity-linked stocks tumbling.

The exporters-heavy FTSE 100 index fell 1.5% despite weakness in the sterling, while the domestically-focussed mid-cap FTSE 250 index declined 1.3%, erasing nearly all of this week’s gains.

Soaring food prices pushed UK consumer price inflation to a new 40-year high last month of 9.1%, the highest rate out of the Group of Seven countries.

UK shares slide after BoE rate hike; ASOS slumps

Miners were the biggest drag on the index, falling 3.0% as industrial metals prices plunged amid US dollar strength and worries over an economic downturn.

Energy stocks also weighed, retreating from a recent rally after crude prices dived more than $4 a barrel amid a push by US President Joe Biden to bring down soaring fuel costs.

Harbour Energy fell 2.2% after the oil and gas producer told the British government that Britain’s planned windfall tax on the energy sector will shrink the company’s investment in the country.

Mike Ashley’s Frasers Group dropped 1.1% after saying it had increased its stake in German fashion brand Hugo Boss.

NatWest Group gained 1.4% to top gains in the FTSE 100 after the British government said it was extending a trading plan to help sell down the taxpayer’s stake in the British lender by another 12 months.

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