Europe midday: Shares rally despite mixed UK inflation data

by | Aug 16, 2023

(Sharecast News) – European shares rallied at midday on Wednesday as investors shrugged off a flatlining of UK core inflation.
The pan-European Stoxx 600 was down 0.18% in early deals with all major regional bourses lower. Shares in the US and Asia also closed sharply lower overnight.

UK consumer price inflation slowed to 6.8% in July, according to official figures. However, core inflation, which strips out volatile food and energy prices, remained unchanged at 6.9% and higher than economist expectations for a reading of 6.8%.

The pound rose marginally against the dollar, 0.26% at $1.2733 and was little changed against the euro, with the single currency last buying 85.78p.

‘Inflation appears finally to have taken a big step downwards, which will come as a big sigh of relief amid cost-of-living pain, but underlying prices are staying uncomfortably stubborn,” said Hargreaves Lansdown analyst Susannah Streeter.

“The pound has edged higher against the dollar with the big bets on the Bank of England pushing up interest rates again in September by another 25 basis points to 5.5%, and the high cost of borrowing set to linger.”

In equity news, UK insurance shares were in demand. Admiral was up after reporting a small rise in half-yearly earnings as it hiked prices in response to claims inflation, but also slashed its interim dividend by 15%. Rival Aviva made strong gains after better interim earnings and a dividend hike, while Direct Line rose in sympathy.

Reporting by Frank Prenesti for Sharecast.com

Related articles

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Latest Articles

Shore Capital hails impressive first half from JD Sports

Shore Capital hails impressive first half from JD Sports

(Sharecast News) - Shares in JD Sports Fashion surged on Thursday morning after the sportswear retailer beat forecasts with its interim results, with broker Shore Capital hailing "significant progress" as it reiterated its 'buy' rating on the stock. Pre-tax profit...

Time for Japan to act (II): State Street Global Markets

Time for Japan to act (II): State Street Global Markets

Written by Michael Metcalfe, Head of Macro Strategy, State Street Global Markets  Writing ahead of the September BoJ gathering in 2022, we argued in Time for Japan to act (first edition!) that the authorities should begin monetary tightening both through moving the...

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Capita signs two new contracts worth £565m

Capita signs two new contracts worth £565m

(Sharecast News) - Outsourcing group Capita said it has signed two new contracts with the UK and Northern Ireland governments worth a combined £565m. Four months after Capita was selected as the preferred bidder, the group has now confirmed it has sealed the deal to...

Rise in UK borrowing limits Hunt’s scope for tax cuts

Rise in UK borrowing limits Hunt’s scope for tax cuts

(Sharecast News) - Britain's budget deficit in August was slightly higher than expected, according to official data published on Thursday, meaning Finance Minister Jeremy Hunt will have less scope for tax cuts ahead of the General Election. Public sector net borrowing...

Join our mailing list

Subscribe to our mailing list to receive regular updates!

No Fields Found.
x