These hawkish moves dampened investor sentiment as it shows that inflation is still clearly not tamed. In addition, Jerome Powell stated in its testimony that more rate hikes will be necessary. The FTSE 100 fell 0.8%. A bright spot was Ocado, which jumped 32% after the Times reported that Amazon is interested in a purchase.

The FTSE 100 was down 0.3% this morning, weighed down by homebuilders which are sensitive to rising rates.

"The sticky nature of core inflation is causing a great deal of anxiety not only on the part of central bankers, but also on the part of those who are due to come off fixed-rate mortgages in the next 12 months." Said CMC Markets analyst Michael Hewson.

GSK rose 5.7% after it said it has reached a settlement with a claimant and is avoiding a lawsuit linked to heartburn drug Zantac.

Things to read today:

Yellen Sees Lower US Recession Risk, Says Consumer Slowdown Needed (Bloomberg)

Central Banks’ battle with inflation enters a new phase of “pain” (Financial Times)

Sterling fails to find boost from Bank of England rate rise (Financial Times)

“Shock and Awe” interest rate rise leaves Sunak’s cost of living pledge in tatters (The Guardian)