Markets hit by fears over rising interest rates, as UK borrowing costs hit 15-year high – business live

Stocks have also opened sharply lower in New York, as investors fret that further interest rate increases are on the horizon.

The Dow Jones industrial average has shed 332 points, or almost 1%, to 33,956 points.

The broader S&P 500 index has also fallen 1%, while the tech-focused Nasdaq has lost 1.2%

Today’s stronger-than-expected ADP payroll report, showing private sector companies added 497,000 jobs in June, has spooked traders.

As we covered earlier, that’s more than double expectations, implying that further monetary policy tightening will be rolled out to cool the US economy.

The minutes of the Federal Reserve’s most recent meeting, released last night, indicated that officials intend to resume interest rate increases at future meetings to fight inflation, after pausing in June.

Stocks have sunk deeper into the red, after today’s blisteringly hot US private sector payroll report (see earlier post).

Investors are concluding that good economic news is bad for the markets, as it means central banks will hike interest rates even higher to fight inflation.

The FTSE 100 index of blue-chip shares has shed 127 points, or 1.7%, to 7,315 points – the lowest since mid-March.

Only four companies, all utilities firms, are in the risers, with the other 96 members of the index losing ground.

Bosses at Sainsbury’s have said they are “not rip-off retailer” or “profiteers” as they defended the profit made by the retailer amid scrutiny over rising food prices.

At the retailer’s AGM today, the supermarket group’s chairman Martin Scicluna defended the industry.

Scicluna said:

“To be very, very clear, we are not profiteering and we are not rip-off retailers.

“We make 3p on every pound we sell. If we offered you something for £1, and I said I made 3p on that product, I don’t think you would call us a rip-off merchant or a profiteer, but some MPs have.”

Scicluna also defended the near-£5m pay deal for chief executive Simon Roberts.

He told shareholders today:

“What we are trying to do is focusing on rewards for Simon, the operating board, senior leadership and colleagues. That’s why our colleague pay has gone up 44% over the past four years.

“It is a lower fixed pay, around 19% of the total, but we incentivised Simon and the team with the bonus and LTIPs (long-term incentive payments) to make sure that we grow profits, because it is good for the company and means we can invest in innovation, technology and reward shareholders.

“All this is balanced and we try to do it in a proper way – because it comes through the board, I stand by it completely.”

Just in: American companies added half a million new jobs last month, which will add to pressure to keep raising US interest rates.

Payroll operator ADP has reported that private sector employment increased by 497,000 jobs in June, with annual pay up 6.4% year-on-year.

That’s more than twice as many new jobs as expected.

Nela Richardson, chief economist at ADP, says:

“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected.

But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”

This may suggest that tomorrow’s official US jobs report, the non-farm payroll, will be strong – although there isn’t much correlation between the two reports…

More than half (55%) of renters are finding it hard to make their housing payments, according to a survey.

Just over a third (35%) of homeowners with a mortgage said they find it difficult to afford their mortgage payments, the YouGov research indicated.

The survey of more than 2,000 people across Britain also asked people how hard they think it will be in 12 months to make their housing payments.

Around half (51%) of renters expect to find it difficult, as do 47% of mortgage holders, according to the findings in June.