UK interest rates likely to rise again, says BoE’s Mann; UK housebuilding falls; FTSE 100 drops from record high – as it happened

A Boundary Dragon, or Griffon, marking out the perimeter of the old City of London, with the Gherkin and Natwest Tower (Tower 42) in the background Photograph: simonpeyto/Getty Images/iStockphoto

3.04pm GMT

Closing summary

Britain’s share index has dropped further from Friday afternoon’s record highs.

The FTSE 100 index is now down 74 points, or 0.95%, at 7827 points, as investors chew over the prospect of further interest rate increases which will slow growth.

Russ Mould, investment director at AJ Bell, says:

Having hit a new all-time high last Friday, the FTSE 100 opened the new trading week with a hangover, pulling back 0.6% to 7,856. Throwing cold water over the party were stronger than expected jobs figures in the US, something closely monitored by the Federal Reserve when making interest rate decisions.

“Ongoing strength in the labour market theoretically reduces the chances of the central bank taking its foot off the pedal when it comes to rate rises. Marketsi are desperate for the rate hike cycle to end, and anticipation around this pivot coming soon is a key reason why equities have done so well in the past month or so.”

Suddenly, the market is beginning to see things the Fed's way. With the SEPTEMBER Fed Funds Futures now trading at 5.05! pic.twitter.com/eQdiQ3vmxi

— Michael J. Kramer (@MichaelMOTTCM) February 6, 2023

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Updated at 3.14pm GMT

2.57pm GMT

In the travel sector, global airline traffic recovered last year to over two-thirds of its pre-Covid levels.

Global airline traffic hit 68.5% of pre-pandemic levels in 2022, and was 64.4% higher than in 2021, according to figures published by global aviation body IATA today.

And with China’s recent reopening, that recovery is expected to continue.

Willie Walsh, IATA’s director-general, criticised some countries for reintroducing tests on travellers arriving from China, following the end of Covid restrictions.

The industry left 2022 in far stronger shape than it entered, as most governments lifted COVID-19 travel restrictions during the year and people took advantage of the restoration of their freedom to travel.

This momentum is expected to continue in the New Year, despite some governments’ over-reactions to China’s re-opening.

The ✈️ industry left 2022 in far stronger 💪 shape than it entered, as most govts lifted #COVID19 travel restrictions during the year and people took advantage of the restoration of their freedom to #travel.

Access full-year traffic release ➡️ https://t.co/QvT07m8ojK pic.twitter.com/LPjeTndwuN

— IATA (@IATA) February 6, 2023

Updated at 2.58pm GMT