DailyFX European Market Wrap: UK Inflation Hits 2.5 Year High Thanks to Weak GBP
European markets were trading flat to marginally lower on Tuesday afternoon with FTSE 100 Rolls-Royce posting the biggest loss.
UK inflation reached its highest rate for two-and-a-half years, mainly as a result of the rising price of fuel as well as a weaker Pound, but failed to meet market expectations. The Consumer Price Index reached 1.8% last month, up from 1.6% in December, according to data from the Office for National Statistics (ONS). This represents the fourth consecutive month that consumer prices have risen and pushes inflation to its highest level since June 2014.
One of the biggest moves in London was Rolls-Royce. The engineering giant recorded a record loss of £4.6bn for 2016 before tax. Much of this was down to Rolls-Royce agreeing to pay £671m to settle corruption cases with UK and US authorities.
Gainers included holiday company TUI which reported a narrower loss for the first quarter of 66.7 million euros, a 17 percent improvement on last year. It is now aiming to offering holidays to customers from countries such as China, India, Spain and Italy. TUI shares currently trade 4.9% higher at 1214p, keeping in place the recent uptrend from June 2016’s 845p low.
Chocolates are getting cheaper or at least should be! Considering the recent boom in cocoa supplies - which is great timing considering billions will be spent of romantic chocolates this Valentine’s Day. There’s been bigger harvests in Latin America and in West Africa, which accounts for about 70 percent of global production. The output gains have pushed cocoa futures to the lowest since 2008. This helps cut costs for Modelez international which is responsible to producing consumer favourites Cadbury chocolates and Oreo cookies.
--- Written by Katie Pilbeam, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.