The FTSE 100 closed higher on Wednesday even though U.S. core inflation came in above forecasts. A Bank of England policymaker also questioned market bets on four rate hikes, and the IMF warned of departmental cuts in Britain.
British stocks rose on Wednesday as investors looked past hotter-than-forecast U.S. core inflation. The FTSE 100 gained 0.70%, while a Bank of England policymaker questioned market bets on four rate hikes.
Elsewhere in Europe, Germany's DAX rose 0.25% and France's CAC 40 gained 0.58%. Sterling, however, was down 0.81% at $1.3147, as of 12:13 ET (17:13 GMT).
U.S. core CPI tops forecasts
U.S. consumer prices rose 0.6% in September, the Bureau of Labor Statistics said, lifting annual inflation to 3.7% from 3.4%, in line with the 3.7% consensus.
Core prices, however, rose 0.3% on the month versus a 0.2% forecast. The annual core rate rose to 2.6% from 2.4%, above the 2.5% expected, and gasoline, up 9.1%, accounted for over half the monthly increase.
BoE's Pill doubts four hikes
BoE chief economist Huw Pill, speaking at the IMF conference in Bangkok, said he was doubtful that four quarter-point hikes, as priced by markets, would be needed. Pill, who has voted for hikes at the last four meetings, said an early move would have shown the BoE wasn't "holding and hoping."
Governor Andrew Bailey, in a CNN interview aired Tuesday, said pass-through from the energy shock had been more subdued in Britain, though he warned that the longer it goes on, the harder it gets.
IMF presses Britain on defence costs
Britain must tell the public that departmental cuts will be needed to pay for higher defence spending, the International Monetary Fund said at its annual meetings in Bangkok. The government faces an annual bill of 11 billion pounds ($14.6 billion) to lift military spending to 3% of GDP by 2030 and has yet to say how it will pay, with plans due at next year's spending review.
Source: Investing.com
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