Much has been made in recent weeks of a potential rise in inflation in the UK thanks to the falling value of the pound as markets come to terms with the UK’s exit from the European Union.
Now, top CFD broker CityIndex says that the latest inflation figures were ‘slightly stronger than expected’ as the headline rate rose to its highest level since March 2016.
Rising costs of oil, clothing and hotel prices push inflation to highest level since March
New figures show that the annual headline rate of inflation in the UK rose to 1.5 per cent in September, in line with expectations and the highest level since March 2016.
The rise is attributed to the increased costs of imports post-Brexit, particularly oil imports which are driving up the cost of motor fuel. The weak pound is also boosting the domestic tourism industry which has resulted in a rise in hotel prices.
CityIndex – one of the largest CFD brokers – says that inflation may not be as high as many analysts expected because supermarkets are currently unwilling to pass on rising prices to consumers. This was evidenced by the row between Unilever and Tesco that erupted recently over the cost of Marmite. The share prices of the major supermarkets has remained steady as analysts believe that keeping prices low and maintaining market share is currently a priority.
CityIndex – among the best CFD brokers – says that the pound has continued to recover as a result of the inflation figures while both the FTSE and GBP both rose as a result of the data. The top CFD broker suggests that the major European stock markets have benefited from recent central bank suggestions that inflation will be allowed to rise to help growth, which is favourable for share prices.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.