FTSE 100 LIVE: Stocks muted as UK inflation surges to highest in over a year
The FTSE 100 (^FTSE) and European stocks got off to a lacklustre start on Wednesday as UK inflation rose more sharply than expected in April, driven by a surge in energy and transport costs.
Consumer prices increased by 3.5% in the year to April, up from 2.6% in March, according to data released by the Office for National Statistics (ONS) on Wednesday. It marks the highest annual rate since February 2024 and sits near the top of economists' forecasts.
The ONS said the largest upward contributions came from housing and household services, transport, and recreation and culture. Clothing and footwear, meanwhile, were the biggest drag on prices.
ONS acting director general Grant Fitzner said: 'Significant increases in household bills caused inflation to climb steeply.
'Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap.
'Water and sewerage bills also rose strongly this year as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year.
'This was partially offset by falling prices for motor fuels and clothing, driven by heavy discounting for children's garments and women's footwear.'
London's benchmark index (^FTSE) was flat in early trade
Germany's DAX (^GDAXI) was also treading water and the CAC (^FCHI) in Paris headed 0.4% into the red
The pan-European STOXX 600 (^STOXX) was down 0.2%
Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
The pound was 0.2% higher against the US dollar (GBPUSD=X) at 1.3411
Follow along for live updates throughout the day:
On the back of today's ONS data, chancellor Rachel Reeves said:
UK inflation rose more sharply than expected in April, driven by a surge in energy and transport costs, pushing the headline rate well above 3% and raising fresh questions for the Bank of England.
Consumer prices increased by 3.5% in the year to April, up from 2.6% in March, according to data released by the Office for National Statistics (ONS) on Wednesday. It marks the highest annual rate since February 2024 and sits near the top of economists' forecasts.
The ONS said the largest upward contributions came from housing and household services, transport, and recreation and culture. Clothing and footwear, meanwhile, were the biggest drag on prices.
ONS acting director general Grant Fitzner said:
Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by 3.8% in the year to April, up from 3.4% in the 12 months to March.
Stocks in Asia were mostly higher overight with the Hang Seng (^HSI) rising 0.5% in Hong Kong, and the Shanghai Composite (000001.SS) 0.2% up by the end of the session.
However, the Nikkei (^N225) fell 0.6% on the day in Tokyo , as export growth in Japan continued to decelerate for the second consecutive month in April.
It came as country grappled with the fallout from tariffs imposed by the US. Imports shrank 2.2% from a year ago, less than the Bloomberg estimates of a 4.2% decline and compared to a downwardly revised increase of 1.8% the previous month.
As a result, Japan's trade balance unexpectedly swung into a deficit of 115.8 billion yen compared to the 215.3 billion yen expected after two months in the black.
Across the pond, major stock indexes eased while longer-dated US Treasury yields inched higher on Tuesday, with investors focused on fiscal concerns as congress debated a bill for sweeping tax cuts.
The S&P 500 (^GSPC) fell 0.39% last night, in what marked the end of a six day winning streak. The Dow Jones (^DJI) finished 0.27% lower, while the tech-heavy Nasdaq (^IXIC) index fell 0.37%.
'The main driver is a consolidation day,' said Briefing.com analyst Patrick O'Hare. 'The market has just been so red hot.'
Investors have also been fixated on higher yields in the Treasury market. Moody's highlighted the deficit last week in a downgrade of the US credit rating.
Good morning, and welcome back to our markets live blog. As usual, we will be taking a deep dive into what's moving markets and happening across the global economy.
Looking at the day ahead, data releases include the UK CPI release for April. Central bank speakers include ECB Vice President de Guindos, the ECB's Centeno, Lane and Escriva, and the Fed's Barkin and Bowman. Finally, earnings releases include TJX and Target.
Here's a quick snapshot of what's on the agenda for today:
7am: Trading updates: M&S, Severn Trent, Great Portland Estates, Helical, Avon Technologies, Currys, Coats, Regional REIT
7am: UK inflation for April
7am: UK retail sales
G7 two-day meeting of finance ministers and central bank governors in CanadaOn the back of today's ONS data, chancellor Rachel Reeves said:
UK inflation rose more sharply than expected in April, driven by a surge in energy and transport costs, pushing the headline rate well above 3% and raising fresh questions for the Bank of England.
Consumer prices increased by 3.5% in the year to April, up from 2.6% in March, according to data released by the Office for National Statistics (ONS) on Wednesday. It marks the highest annual rate since February 2024 and sits near the top of economists' forecasts.
The ONS said the largest upward contributions came from housing and household services, transport, and recreation and culture. Clothing and footwear, meanwhile, were the biggest drag on prices.
ONS acting director general Grant Fitzner said:
Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by 3.8% in the year to April, up from 3.4% in the 12 months to March.
Stocks in Asia were mostly higher overight with the Hang Seng (^HSI) rising 0.5% in Hong Kong, and the Shanghai Composite (000001.SS) 0.2% up by the end of the session.
However, the Nikkei (^N225) fell 0.6% on the day in Tokyo , as export growth in Japan continued to decelerate for the second consecutive month in April.
It came as country grappled with the fallout from tariffs imposed by the US. Imports shrank 2.2% from a year ago, less than the Bloomberg estimates of a 4.2% decline and compared to a downwardly revised increase of 1.8% the previous month.
As a result, Japan's trade balance unexpectedly swung into a deficit of 115.8 billion yen compared to the 215.3 billion yen expected after two months in the black.
Across the pond, major stock indexes eased while longer-dated US Treasury yields inched higher on Tuesday, with investors focused on fiscal concerns as congress debated a bill for sweeping tax cuts.
The S&P 500 (^GSPC) fell 0.39% last night, in what marked the end of a six day winning streak. The Dow Jones (^DJI) finished 0.27% lower, while the tech-heavy Nasdaq (^IXIC) index fell 0.37%.
'The main driver is a consolidation day,' said Briefing.com analyst Patrick O'Hare. 'The market has just been so red hot.'
Investors have also been fixated on higher yields in the Treasury market. Moody's highlighted the deficit last week in a downgrade of the US credit rating.
Good morning, and welcome back to our markets live blog. As usual, we will be taking a deep dive into what's moving markets and happening across the global economy.
Looking at the day ahead, data releases include the UK CPI release for April. Central bank speakers include ECB Vice President de Guindos, the ECB's Centeno, Lane and Escriva, and the Fed's Barkin and Bowman. Finally, earnings releases include TJX and Target.
Here's a quick snapshot of what's on the agenda for today:
7am: Trading updates: M&S, Severn Trent, Great Portland Estates, Helical, Avon Technologies, Currys, Coats, Regional REIT
7am: UK inflation for April
7am: UK retail sales
G7 two-day meeting of finance ministers and central bank governors in Canada
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