UK overview: Rate hike fears return

Despite better-than-expected GDP growth in China of 3% in 2022; the FTSE 100 fell 0.1% yesterday due to new data showing the UK job market remains tight, raising expectations that the Bank of England will have to implement another aggressive rate hike next month.

Weekly earnings rose 6.4% year-on-year, topping expectations, while the unemployment rate stayed at 3.7%.

Sentiment was also hit by the release of mixed results by Goldman Sachs.

This morning the FTSE 100 remained flat after new figures reassured investors that efforts from the central bank to curb inflation were working. The Office for National Statistics revealed that British consumer price inflation fell in line with expectations to 10.5% in December from November's 10.7%. Core CPI, excluding energy and food, remained unchanged at 6.3% in December. 

Among stocks, Currys gained 9% after it reiterated its guidance for the full year, despite a deterioration in its international business.

Burberry is up 1.3% after it said it remained confident it could achieve its medium-term targets, although comparable sales growth slowed to 1% in the fourth quarter.

 

Things to read today:

IMF signals upgrade to forecasts as optimism spreads at Davos (Financial Times)

Europe Is Winning the Winter War by Sheer Luck (Bloomberg)

UK inflation dips slightly to 10.5% but people continue to feel pinch (The Guardian)