Shares in retail giant Kingfisher, the company behind DIY powerhouse B&Q, nosedived on Thursday as a grim economic forecast from the OECD sent shockwaves through the London market.
The Organisation for Economic Co-operation and Development delivered a stark warning, significantly downgrading its growth prediction for the UK economy. This immediately rattled investor confidence, with Kingfisher becoming one of the day's most prominent casualties on the FTSE.
Market Jitters Hit Home Improvement Giant
The sell-off highlights growing anxiety about the UK's economic resilience under the new Labour government. Kingfisher, which also owns Screwfix, is particularly sensitive to shifts in consumer spending and housing market confidence, making it a bellwether for domestic economic health.
As trading closed, Kingfisher shares were among the biggest fallers on the London index, wiping millions off the company's market value. The sharp decline underscores the immediate challenge facing Chancellor Rachel Reeves, who has pledged to prioritise economic stability and growth.
OECD Forecast Paints Challenging Picture
The OECD's revised outlook suggests a tougher road ahead than previously anticipated. The international organisation pointed to persistent inflation and higher interest rates as key factors constraining economic expansion.
This external vote of no confidence presents an early test for the government's fiscal plans. The report will likely intensify scrutiny on the Chancellor's upcoming budget, where she will be under pressure to outline a credible strategy for stimulating growth without exacerbating inflation.
For companies like Kingfisher, the outlook means a potential slowdown in consumer discretionary spending. Home improvement projects are often one of the first expenses households cut back on when economic uncertainty looms.
All eyes are now on Whitehall to see how the new government responds to this challenging economic landscape and whether it can restore the confidence clearly shaken in today's market turmoil.
