FTSE in red as inflation highest in decade

Soaring inflation and a number of underwhelming company updates weighed on the FTSE as it once again lagged behind other global indices.

Consumer Price Index (CPI) inflation rocketed from 3.1% to 4.2% last month, the Office for National Statistics said, adding to the cost pressures facing UK firms.

The FTSE 100 closed 35.77 points, or 0.49%, lower at 7,291.2 yesterday.

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been another disappointing session for the FTSE 100, once again finding itself undermined by several disappointing company earnings reports, and a rather hot October UK inflation report, which saw CPI hit its highest level in over a decade.

“The biggest fallers are all companies that appear to have underwhelmed investors with their latest trading updates.

“While the FTSE 100 and FTSE 250 have both slipped back, the Dax and Cac 40 have continued to look resilient with more record highs, although the afternoon session looked lacklustre.”

The key markets in mainland Europe finished higher for the third day in a row.

The German Dax increased by 0.02% and the French Cac improved by 0.15%.

The main US markets failed to carry on Tuesday’s rally and moved slightly lower on the opening bell due to strength in the dollar.

Meanwhile, sterling was significantly boosted by the rise in inflation and rising retail prices, with the pound hitting its highest against the euro since February 2020.

The pound was 0.11% higher versus the US dollar at 1.347, and up 0.05% against the euro at 1.191.