FTSE slips in the red despite UK inflation cooling during November
The European stock market fell in the red on Wednesday, despite being positive. UK inflation easing back in November It is a sign of hope that rising prices have reached an end,
The FTSE 100 is a London stock exchange.^FTSEThe index dropped more than 0.4% in the first week of opening. It was hampered by the miners, who were the biggest drag. The CAC (^FCHI) tumbled 0.4% in Paris, and the Frankfurt DAX (^GDAXI) was also 0.4% lower after the bell.
According to ONS, the Consumer Price Index (CPI) was 10.7% in October. That’s down from 11.1% 41 years ago.
This decrease in pressure eases on the Bank of England (BoE), who is expected to make its next interest rate decision tomorrow.
“Overall, inflation has passed its peak and will continue to fall from here. That will prompt a sigh of relief in Threadneedle Street,” Paul Dales, chief UK economist at Capital Economics, said.
“But with the economy still proving resilient and wage growth still strong, the Bank of England won’t be complacent.
“So interest rates are still going to be raised further, but the Bank will probably raise them at a slower rate and the risk is that they peak at a lower level than the 4.5% we are forecasting.”
Continue reading: Cost of living payments should be spread out over winter, say MPs
Across the pond, S&P 500 futures (ES=F) were almost 0.1% higher, Dow futures (YM=F) also climbed nearly 0.1%, and Nasdaq futures (NQ=F) were 0.06% higher as trade began in Europe.
Yesterday, Sam Bankman Fried (the disgraced founder and CEO of FTX) was refused bail by a Nassau, Bahamas court.
It happened as the dollar tried to recover from a rising pound.GBPUSD=XInvestors were pleased with the US inflation data that was softer than expected. Economists think this could allow the Federal Reserve slow down its rate of interest rate increases.
Investors will keep their eyes peeled for the Federal Reserve’s decision on US interest rate later this evening.
Continue reading: Bank of England: 4 million mortgages to rise next year
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “The softer-than-expected inflation print in the US sent the stocks higher and the US dollar lower, but the S&P 500 couldn’t clear key resistance levels, as investors know that the Federal Reserve (Fed) Chair Jerome Powell could coldheartedly kill the market joy at his post-FOMC press conference today.”
On Wednesday, Asian markets rose with the Nikkei.^N225) climbing 0.7% in Tokyo while the Hang Seng (^HSI) rose 0.4% in Hong Kong and the Shanghai Composite (000001.SS) ended flat on the day.
Watch: How does inflation impact interest rates?