Inflation data fuels rate hike fears

UK inflation cooled from 11.1% in November to 10.5% in December, but core inflation, which excludes food and energy, rose above expectations at 6.3%, while the consensus was 6.2%. This fueled worries that the Bank of England will implement another 0.5% rate hike next month, with the FTSE 100 ending the day 0.2% lower.

This morning, the index was down 0.6%, hampered by oil majors and miners, as crude and copper prices declined following a series of disappointing statistics in the United States. For the month of December, retail sales contracted more than expected and so did industrial production. This is a sign that the economy is slowing down, in this case a little faster than forecasters were expecting.

In addition, data revealed that UK house prices fell more than expected last month due to higher interest rates and inflation.

Among stocks, Dr. Martens dropped 25% after it issued a profit warning.

 

Things to read today:

What happens when the US hits the debt ceiling? (Financial Times)

Davos Isn’t Too Down on Britain (Bloomberg)