The FTSE 100 had one of its worst weeks since January, with sterling tumbling to a seven-month low as nervous investors flocked to the dollar.

Andrew Hunter, from Capital Economics, said US policymakers would now likely take a more cautious approach to tapering.

“In the absence of the delta surge the Fed may well have been ready to make a formal announcement on tapering in September, but that will probably now depend on how the hard activity and employment data for August hold up,” he said.

“If there are further signs of a slowdown I suspect most officials would prefer to wait for at least another month or two.”

Other areas have shown strength, however, including the US labour market.

Kevin Cummins, chief US economist at NatWest Markets, said “they would like to start the process of tapering but with near-term risks on growth from delta and wanting to see evidence that the recent pace of strength in the labour market is…

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