Inflation threat sparks global stock market sell-off

A global stock market rout sparked by fears of higher inflation that started on Wall Street spread to the FTSE 100 as investors braced for US price pressures to hit a 10-year high. London’s blue-chip index tumbled below 7,000 points in its biggest fall in more than two months after a tech-led shares slump ahead of Wednesday's inflation figures for the world’s largest economy. US inflation is expected to have jumped from 2.6pc to 3.6pc in April as global shortages send commodity prices soaring and demand is stoked by stimulus and reopenings. The expected pick-up would push US inflation to its highest point since 2011, prompting more questions over whether the Federal Reserve will intervene to stop the economy overheating. The FTSE 100 closed 175.6 points lower at 6,947.9, a one-week low, as inflation worries spread from Wall Street to Asia and Europe. IAG, the owner of British Airways, took the wooden spoon with a 7.4pc decline to 194.3p, while the London Stock Exchange Group was the sole riser, closing just 4p higher. After being dragged off record highs on Monday, frothy share prices in New York fell heavily again on Tuesday. The S&P 500 slipped a further 1.3pc at the opening bell while the tech-heavy Nasdaq index lost 2.2pc before regaining some ground. As inflationary pressures build on a number of fronts, expectations for prices in the US, UK and Europe have climbed to multi-year highs in recent months.