UK Inflation At 15-Month High

Tuesday, 12th April: For the second consecutive day, the FTSE 100 opened negatively, dipping slightly further to losses of -0.4% following UK inflation data released by the Office of National Statistics (ONS). Consumer prices inflation rose by 0.5% in the 12 months to March, up from 0.3% in February (vs 0.4% expected). This is the highest level of inflation in the UK since December 2014, but nothing to get too excited about as it is still well below the Bank of England’s (BoE) 2% target. The main contributors to the rise has been air fares and clothing prices, with the early long Easter weekend contributing also. The data release made the pound rise against both the US dollar and the Euro peaking at $1.434 and €1.256 respectively.

The inflation data, and resulting stronger pound led to the FTSE 100 dipping before Brent oil surged ahead during European trading, more so after the US markets opened. This ultimately led to the biggest gainers on the index  being in the oil and miners sector as Anglo American ended the day with more than 9% gains. Standard Chartered took silver medal at the close following JP Morgan reiterating its buy recommendation on the emerging markets focused bank. Brent oil leapt to $44.70 a barrel (at the time of writing), its highest level in 2016.  The price jumped in the lead up to a meeting between OPEC and non-OPEC oil producers this Sunday, to be held in Qatar, as expectations remain high that oil exporters could agree to freeze output levels as the oil market remains over supplied.

At the close markets in Europe ended the day with gains as the FTSE 100 closed +0.68%, the CAC +0.77% and the DAX +0.81%. In the US, the Dow Jones is trading +0.81%, whilst the S&P 500 is +0.69% at the time of writing. The Nikkei closed +1.13% whilst the Japanese yen is currently ¥108.55 against the dollar.