Adrian HollidayOctober UK inflation at +3.0% remains at its highest level for more than five years. The Office for National Statistics confirmed the numbers earlier; no change from September. Food, not fuel, is now the focus. That’s because the price of food and non-alcoholic drinks climbed to 4.1% – the highest clip for more than four years (vegetable price inflation is at 5.7%).
So some worry for grocer retailers who won’t want to raise food prices as the festive season looms closer. However there was a bit of cheer for input price inflation, the metric companies use for the cost of raw materials, slipping from 8.1% to 4.6%.
Flailing UK wage inflation will land tomorrow and the figures will surely lag well behind the CPI benchmark, especially hard for low-income families.
By mid-afternoon the pound had barely moved against the dollar at 1.3122; the euro though was +0.76% up against the greenback – a two-and-a-half-week high – at 1.1756 thanks to surging German economic confidence.
For the third quarter the Germany economic output lifted +0.8% new data revealed this morning. This was a substantially better number than had been anticipated. Eurozone GDP data will be issued tomorrow; the strong German numbers may indicate more euro buoyancy tomorrow.
- UK FTSE 100 7,414.5 -0.01%
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- Gold 1,277.70 -0.09%
- Oil WTI 56.14 -1.09%
Honda and Aston Martin warn on Brexit non-deal
More pressure today on Theresa May to secure a Brexit deal, this time from the UK car industry. Honda and Aston Martin bosses have warned that the possibility of the UK quitting the EU without a secure trade and customs deal would be catastrophic.
Most car manufacturers now use just-in-time production logistics, dependent on ultra-quick sourcing of parts from suppliers. If those parts are subject to custom delays than that is a huge issue.
“Mitigating against the impact of possible delays,” says Honda, “would require doubling warehousing capacity to store a greater portion of components on-site, increasing the amount of stock in transit and the introduction of new processes.”
Such investments would add hugely to its cost base. Ford and Vauxhall have also issued warnings with Ford openly saying that a non-deal Brexit threatens the core of its UK operations.
Aston Martin warns on crashing out of the EU: ShutterstockBombardier clinches EgyptAir deal
However there is better news for Bombardier. EgyptAir has confirmed interest in up to 24 C Series aircraft worth a paper value of $2.1bn. It’s thought the deal was agreed at the Dubai Airshow.
EgyptAir is attempting to upgrade its fleet. Bombardier recently offloaded a majority stake in its C Series jet business to European aerospace giant Airbus. Bombardier has been embroiled in a US trade dispute which saw 300% import tariffs imposed on some of its planes.
Breaking news: The FTSE 100 closes at 7,414 with Tesco shares soaring more than +6%. Vodafone shares surge more than +5%.
