UK stocks muted as inflation data dims interest rate cut bets
The blue-chip FTSE 100 was up 0.2% as of 1035 GMT, while the midcap FTSE 250 index was flat.
Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year at 3.6% in June, as higher costs of motor fuel, transport and food pushed up prices.
"There is a real threat of stagflation as the rate of inflation moves higher and the economy is stuck in the mud. It puts the Bank of England in a tricky situation with regards to monetary policy decisions," said Dan Coatsworth, investment analyst at AJ Bell.
The central bank is largely expected to cut interest rates by a quarter-point in August after recent economic data fuelled concerns of weaker domestic growth and labour market, but the chances of such a move dimmed after Wednesday's inflation data.
The BoE will closely watch the employment and wages figures due on Thursday.
Meanwhile, UK finance minister Rachel Reeves on Tuesday announced measures to boost the finance sector, including reforming requirements for banks to separate retail and investment banking activities, easing regulations and a plan to get more savers investing in stocks.
In corporate updates, AstraZeneca fell 1.1% after the drugmaker's experimental therapy, anselamimab, failed to meet the main goal of a late-stage study for the treatment of AL amyloidosis, a rare condition that causes a buildup of protein deposits in the body.
Rio Tinto rose 1.3% after the mining giant reported its strongest second-quarter iron ore production since 2018, a day after promoting its iron ore chief Simon Trott to CEO.
Antofagasta edged up 0.5% after the Chilean miner said its copper production rose 11% in the first half of 2025, on improved output from its two concentrators.
(Reporting by Ankita Yadav in Bengaluru; Editing by Shinjini Ganguli)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
a day ago
- Zawya
UK retail downturn stretches into 10th month, CBI says
A downturn in British retail sales extended into its 10th month in July as rising prices weighed on consumers, although the pace of the fall was less severe than in June, a Confederation of British Industry survey showed on Monday. The CBI's monthly gauge of how retail sales compared with a year earlier stood at -34 this month, an improvement on June's -46 but still a sign of weakness in demand. A measure of expected sales for August rose to -31 from -49, the CBI said. "Firms reported that elevated price pressures – driven by rising labour costs – and economic uncertainty continue to weigh on household demand, which has contributed to sales volumes falling since October 2024," Martin Sartorius, principal economist at the CBI said. Employers groups have said finance minister Rachel Reeves' decision to increase the social security contributions they pay for their staff, as well as an increase in the minimum wage, is contributing to higher prices. Weak demand was mirrored across the distribution sector, with wholesale and motor trades also seeing declining sales, Sartorius said. Official data published last week showed British consumers shopped more in June after May's big fall with hot weather helping to increase sales of drinks, clothes and car fuel. However, in the three months to June, sales volumes rose by 0.2%, the weakest increase since the three months to February. Many households are feeling the squeeze again from an inflation rate that rose to 3.6% in June. While the CBI's overall sales gauge remained in negative territory, online sales volume rose for a third month in a row, albeit marginally. The data was collected between June 27 and July 15 and was based on responses from 56 retailers and 91 wholesalers. (Writing by William Schomberg Editing by William James)
Gulf Today
2 days ago
- Gulf Today
US, EU chief seek deal in transatlantic trade standoff
US President Donald Trump and EU chief Ursula von der Leyen were set for make-or-break talks in Scotland Sunday, aimed at ending a months-long transatlantic trade standoff, as negotiations went down to the wire. Trump has said he sees a one-in-two chance of a deal with the European Union, which faces an across-the-board US levy of 30 per cent unless it strikes a trade pact by August 1 − with Washington warning Sunday there would be 'no extensions.' Von der Leyen's European Commission, negotiating on behalf of EU countries, is pushing hard for a deal to salvage a trading relationship worth an annual $1.9 trillion in goods and services. According to an EU diplomat briefed ahead of the meeting, set for 4:30 pm (1530 GMT), the contours of a deal are in place after talks went late into Saturday night − but key issues still need settling. And of course the final word lies with Trump. 'A political deal is on the table − but it needs the sign-off from Trump, who wants to negotiate this down to the very last moment,' the diplomat told AFP. The proposal, they said, involves a baseline levy of around 15 per cent on EU exports to the United States − the level secured by Japan − with carve-outs for critical sectors including aircraft and spirits, though not for wine. Any deal will need to be approved by EU member states − whose ambassadors, on a visit to Greenland, were updated by the commission Sunday morning, and would meet again after any accord. According to the EU diplomat, the 27 countries broadly endorsed the deal as envisaged − while recalling their negotiating red lines. Baseline 15 per cent - The Trump-von der Leyen meeting was taking place in Turnberry on Scotland's southwestern coast, where the president owns a luxury golf resort. He was out on the course for much of the weekend. The 79-year-old Trump said Friday he hoped to strike 'the biggest deal of them all' with the EU. 'I think we have a good 50-50 chance,' the president said, citing sticking points on 'maybe 20 different things'. The EU is focused on getting a deal to avoid sweeping tariffs that would further harm its sluggish economy − while holding out retaliation as a last resort. Under the proposal described to AFP, the EU would commit to ramp up purchases of US liquefied natural gas, along with other investment pledges. Pharmaceuticals − a key export for Ireland − would also face a 15-percent levy, as would semi-conductors. The EU also appears to have secured a compromise on steel that could allow a certain quota into the United States before tariffs would apply, the diplomat said. Questions on auto sector - Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-percent levy on cars, 50 per cent on steel and aluminium, and an across-the-board tariff of 10 per cent, which Washington threatens to hike to 30 per cent in a no-deal scenario. It was unclear how the proposed deal would impact tariff levels on the auto industry, crucial for France and Germany, with carmakers already reeling from the levies imposed so far. While 15 per cent would be much higher than pre-existing US tariffs on European goods − averaging 4.8 per cent − it would mirror the status quo, with companies currently facing an additional flat rate of 10 per cent. Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target. Beyond that, countries like France say Brussels should not be afraid to deploy a so-called trade 'bazooka' − EU legislation designed to counter coercion that can involve restricting access to its market and public contracts. But such a step would mark a major escalation with Washington. Ratings dropping - Trump has embarked on a campaign to reshape US trade with the world, and has vowed to hit dozens of countries with punitive tariffs if they do not reach a pact with Washington by August 1. US Commerce Secretary Howard Lutnick said Sunday the August 1 deadline was firm and there will be 'no extensions, no more grace periods.' Polls suggest however the American public is unconvinced by the White House strategy, with a recent Gallup survey showing his approval rating at 37 per cent − down 10 points from January. Agencies
Arabian Post
3 days ago
- Arabian Post
OPEC+ Set to Maintain Output Plans Despite Market Dynamics
Arabian Post Staff -Dubai OPEC+ is expected to maintain its current strategy on oil production levels when the Joint Ministerial Monitoring Committee convenes on Monday, despite shifting market conditions. Key delegates from the oil-producing coalition indicated that there will be no immediate changes to the group's decision to increase output in August, which will see a rise of 548,000 barrels per day. The JMMC, comprising high-ranking officials from the Organization of the Petroleum Exporting Countries and its allies, including Russia, is scheduled to meet at 1200 GMT. The outcome of this meeting has drawn considerable attention as global oil markets adjust to fluctuating demand patterns and supply conditions. ADVERTISEMENT Several OPEC+ delegates, speaking anonymously, stated that the group is unlikely to alter its course, with the decision to gradually increase production still firmly in place. 'There is a consensus that the demand recovery during the summer months is adequate to absorb the additional supply,' one source said. 'The market dynamics currently seem to support this increase, and we are committed to regaining lost market share.' Since the production cuts agreed upon in 2020 to counter the downturn caused by the COVID-19 pandemic, OPEC+ has been slowly increasing its oil output in a phased approach. However, with global economies on a recovery path, the group is under increasing pressure to balance its output against rising demand, particularly in regions such as Asia and North America. While the rise in demand, particularly during the summer driving season, is helping to absorb the additional barrels, concerns have been voiced over the potential for global oil prices to soften. The overall impact of geopolitical tensions, the economic slowdown in key markets, and the risk of higher interest rates remain points of consideration for the group. However, OPEC+ delegates have indicated that their immediate focus will be on ensuring market stability while continuing to rebuild their market share lost during the pandemic. Experts also pointed out that a significant shift in the global oil market would need to occur before the JMMC meeting in order to warrant a change in strategy. For now, the consensus is that OPEC+ will stick with the current path to bolster its market position. The decision to implement production increases has thus far been perceived as cautious and calibrated, aimed at preventing market volatility while capitalising on seasonal demand. The continued commitment to raise output reflects OPEC+'s broader goal of restoring pre-pandemic production levels, despite the headwinds faced in navigating complex global markets. With increasing production from non-OPEC countries, including the United States and Brazil, OPEC+ is mindful of its position and market share but seeks to avoid dramatic shifts in strategy that could destabilise oil prices. The JMMC's decision will carry significant weight in shaping the oil market's near-term trajectory. While global oil inventories remain relatively tight, with a demand spike in the Northern Hemisphere, OPEC+ is closely monitoring the response of major economies to any potential macroeconomic uncertainties. The meeting will also likely set the tone for discussions in future OPEC+ summits, where longer-term strategies will be evaluated in light of emerging trends, particularly energy transitions.
