With a lack of news surrounding the market’s major preoccupations – Brexit and the US-China trade war – Wednesday morning saw investors’ turn their attention, however briefly, to the latest UK inflation reading.
Having spent most of spring and summer flitting from 2.4% to 2.5% and back again, UK inflation in August unexpectedly jumped to 2.7%, with the big movers being the cost of transport, clothing and footwear, and a rise in the price of things like theatre tickets and video games.
Though another Bank of England rate hike is likely a way off, the pound still got a boost following the release. Cable jumped 0.3%, hitting a fresh near 2 month peak, while against the euro it reversed its early dip to climb 0.1%, keeping it above €1.127. In turn this took the wind out of the FTSE's sails, with the UK index only able to hold onto a handful of the growth seen earlier in the session (it did, however, crucially remain the right side of 7300).
Looking to the afternoon and the Dow Jones isn’t giving the game away just yet. The futures have the index unchanged when the bell rings on Wall Street, investors perhaps unwilling to push the Dow any higher in the current climate having sent it to an 8 and a half month peak of 26300 on Tuesday.
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