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FTSE Sinks Below 7,000 As UK Inflation More Than Doubles Month-on-Month

By Spreadex (Connor Campbell)Stock MarketsMay 19, 2021 09:56
uk.investing.com/analysis/ftse-sinks-below-7000-as-uk-inflation-more-than-doubles-monthonmonth-200476475
FTSE Sinks Below 7,000 As UK Inflation More Than Doubles Month-on-Month
By Spreadex (Connor Campbell)   |  May 19, 2021 09:56
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Well, the calm was nice while it lasted. The markets returned to last week’s inflation-fearing panic on Wednesday following a commodity-bloated CPI reading out of the UK.

Already investors were preparing themselves for the UK’s inflation data for April to double month-on-month, from 0.7% to 1.4%. Instead, it came in just higher than forecast at 1.5%, dragging questions over inflationary pressures and what that means for interest rates kicking and screaming back into the spotlight.

There were reasons not to be quite as alarmed. The core reading, which strips out volatile elements, most pertinently commodities, saw a much milder rise, from 1.1% to 1.3%.

Still, that was cold comfort for the markets, which reacted exactly as you’d expect given their recent skittishness around inflation data.

The FTSE sank 0.9%, or 60 points, after the bell, the index knocked back under 7,000 in the process. And it wasn’t even Europe’s worst performer.

Both the DAX and CAC were down 1.1% apiece, leaving the German and French bourses at 15,230 and 6,300 respectively.

It didn’t help that the European markets were already on the backfoot thanks to the Dow’s decline last night, one that left the index only 60 points above 34,000.

The Dow is set to drop below that keep level this afternoon, with the futures pointing to a 0.4%, or 120-point, slump when trading starts Stateside.

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FTSE Sinks Below 7,000 As UK Inflation More Than Doubles Month-on-Month
 

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FTSE Sinks Below 7,000 As UK Inflation More Than Doubles Month-on-Month

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