UK stocks rise modestly as inflation accelerates

Summarised from 2 outlets · Updated 21 Oct, 18:03 · Archive

London's FTSE 100 index rose 0.2% despite UK inflation climbing to 3.5% in September.

London's stock markets ended modestly higher on Wednesday despite accelerating inflation. The FTSE 100 rose 19.88 points, 0.2%, to 10,752.88, while the FTSE 250 rose 75.02 points, 0.3%, to 24,439.78. The blue-chip index had opened lower after inflation figures exceeded expectations.

The Office for National Statistics said annual consumer price inflation picked up to 3.5% in September from 3.1% in August, exceeding market consensus of 3.4%. Core inflation rose to 2.8% from 2.6%, and services inflation climbed to 3.7% from 3.4%. The increase was driven largely by higher transport costs, particularly motor fuels.

The higher inflation, alongside stronger-than-forecast public borrowing, adds pressure on Chancellor John Healey ahead of next week's Budget. Cathal Kennedy, senior UK economist at RBC Capital Markets, said the CPI rise 'removes any final obstacles to November BoE hike'. He warned inflation would rise further as a 4% increase in domestic utility bills from October 1 feeds into next month's data.

How it is being reported

• SpaceX lifts mood but hot inflation limits gainsThe FTSE 100 index ended up 19.88 points at 10,752.88.Evening Standard · 21 Oct, 17:32
• SpaceX lifts mood but hot inflation limits gainsThe FTSE 100 index ended up 19.88 points at 10,752.88.Independent Business · 21 Oct, 17:32

In this story: Bank of England · Office for National Statistics · SpaceX · John Healey · RBC Capital Markets

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