London's FTSE 100 Dips Amid Market Caution and Inflation Jitters

London's FTSE 100 fell to a one-week low amid market weakness and caution ahead of inflation data and earnings reports. The index was down 0.5%, with significant declines seen in the personal goods and mining sectors. Market expectations around interest rate decisions in the UK and the US also influenced trading.

London's FTSE 100 hit a one-week low on Tuesday amid broad market weakness, as investors exercised caution ahead of domestic inflation data and looked to upcoming earnings reports.

The blue-chip FTSE 100 index was down 0.5% while the mid-cap FTSE 250 fell 0.2% by 0715 GMT, on track to break a streak of three consecutive gains. The personal goods sector was the most affected, dropping 2.3% after reaching a 14-year low in the last session. Burberry led the losses with a 3.3% drop, extending its decline from Monday's 16% fall.

In other sectors, Rio Tinto's London-listed shares fell 2% after reporting second-quarter iron ore shipments below analyst estimates, dragging industrial metal miners down by 1.3%. Prices of copper also fell following this trend. Domestic consumer and producer prices data are under scrutiny this week ahead of the Bank of England's monetary policy decision. Markets are split on a potential rate cut in August, affected by falling inflation rates but tempered by hawkish comments from policymakers and global political uncertainties.

In the U.S., bets for a rate cut in September grew after Federal Reserve Chair Jerome Powell indicated progress in controlling inflation over the second quarter. Among notable stocks, Ocado surged 18.2% to lead the FTSE 250 after reporting a smaller-than-expected first-half loss and raising its financial outlook for the year. Conversely, Vanquis Banking Group dropped 13.5% after warning it might not meet its full-year return targets on tangible equity.

(With inputs from agencies.)