US consumer price inflation came through earlier in the day, pushing 0.1% higher in July taking it to 1.7% year on-year. However that inflation 0.1% rise was less than hoped, despite an under pressure dollar and higher import prices; Reuters analysts had estimated a 0.2% rise.
The slower-than-hoped inflation pick-up means more pressure on the Federal Reserve to hold back from raising interest rates (the ‘Fed has a 2% inflation target).
Blue chip US stocks sank after trading started however the Dow steadied with weak-ish gains. At 3.45pm this afternoon the Dow was at 21,901, up 0.28%. The US-North Korean tensions were all too evident in France though with the CAC 40 slumping almost 1% to 5,065.
However the German Dax was more even-handed, climbing eight points to 12,023. At 4pm the pound was at $1.2977, up 0.03% while the euro was at $1.1790, up 0.16%. Tonight the FTSE 100 ended more than 1% lower at 7,309.96 with chunky drops for Standard Life and Rio Tinto, down -3.75% and -3.15%.
- UK FTSE 100 7,309 -1.08%
- Dow 21,118.42 +0.12%
- S&P 500 2,445.53 +0.30%
- Nasdaq 6,247.26 +0.48%
- Nikkei 225 19,729.74 -0.05%
- DAX 12,154.72 -0.22%
- CAC 40 5,130.49 +0.46%
- Gold 1,291.40 +0.10%
- Oil WTI 49.25 -0.26%
Tata pension deal clinched
Some relief for 130,000 Tata steelworkers on their pension rights though most will see a reduction in long-term benefits in exchange for some employment security. A new deal means Tata will sink £550m into the £15bn British Steel Pension Scheme (BSPS) fund. That move is supplemented by a 33% stake in UK Tata Steel operations.
Tata itself claims the deal is “sustainable” while the UK Pensions Regulator has also approved of the deal. “After several months of robust negotiations in this case, we believe that it is the best possible outcome for everyone involved in what is a very difficult situation."
High street retailer Wilko readies for redundancies
We move to the high street for bad news from Wilko: the home retailer says up to 4,000 staff could be made redundant as the homewares giant struggles with a profits lurch and top-heavy management.
Last month Wilko saw profits tumble by 80%. This profits hit was part-blamed on the new minimum living wage – £7.50 for anyone aged 25 or over – the company claims. Wilko still has more than 400 stores across the UK but it is in competition with pound stores, not to mention European upstarts such as Aldi and Lidl.
Breaking news: Russian GDP rises 2.5% in the second quarter according to the Russian Federal Statistics Service.