European markets are dropping after the Federal Reserve hiked rates late on Wednesday

European markets slipped on Thursday morning in response news that the Federal Reserve raised interest rates by 25 basis points on Wednesday.

In Britain, the FTSE 100 dropped 0.67% and was at 7,424 points around an hour after the open, extending losses from Wednesday’s trading session.

Here is the chart:

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FTSE 100, 15th June.
source
Investing.com

Top gainers in the first hour of trade are HSBC, up 0.41%, and British American Tobacco, up 0.11% as of 08:51 a.m. BST (03:51 EST). Meanwhile, housing firm Persimmon saw the biggest fall, of 5.20%, followed by Next, which saw a drop of 3.28%.

Many of the other European markets suffered bigger losses, with the French CAC 40 and IBEX 35 dropping by 0.87% and 0.88% respectively. The German DAX, meanwhile, saw a more moderate drop of 0.52%.

Here is the scoreboard:

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Major World Indices
source
Investing.com

The early morning moves come as “investors digest a mixed Fed update where it elected to keep calm and carry on, delivering another US interest rate hike as markets had priced, in spite of stateside data continuing to disappoint,” Mike van Dulken of Accendo Markets wrote in an email a little earlier.

“It also suggested just one more hike this year but tried to balance this with much detail (except start date) on how it plans to deflate that QE-bloated $4.2tn balance sheet.”

Fed members are expecting one more rate hike in 2017 and three in 2018, Fed forecasts showed.

The Bank of England is will at midday today decide how policymakers will respond to the drop in consumer spending, caused in part by rising inflation in the UK and negative wage growth. While the bank is not expected to make any moves in interest rates on the day, the minutes of the MPC meeting could deliver hints about whether a hike in rates could be on the cards in the near future.