Yahoo Finance LaToya Harding
Global stocks rise as UK inflation beats forecasts and eurozone avoids recession
A look at how markets performed this Wednesday
The FTSE (^FTSE) and European stocks pushed higher on Wednesday as UK inflation unexpectedly remained unchanged at 4% in January, and Eurozone growth held steady at 0%. Stocks on Wall Street later followed suit, recovering from a sell-off the session before.
Economists had predicted a small inflation increase to 4.2%, so the reading came in softer reading than expected. This possibly opens the door to earlier interest rate cuts from the Bank of England (BoE).
London's benchmark index finished 0.7% higher, buoyed by a weaker pound.
Germany's DAX (^GDAXI) rose 0.4% up and the CAC (^FCHI) in Paris closed 0.7% higher.
The pan-European STOXX 600 (^STOXX) ended the session 0.5% higher.
The Office for National Statistics (ONS) said prices for food and non-alcoholic beverages fell by 0.4% between December and January, compared with a rise of 0.6% a year ago.
Statistics office Eurostat confirmed that the eurozone narrowly avoided a recession in the final three months of 2023.
Wall Street pushed higher with the S&P 500 (^GSPC) up 0.4%, the tech-heavy Nasdaq (^IXIC) 0.5% higher, and the Dow Jones (^DJI) advancing 0.1%.
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Virgin Media and O2 customers hit with 8.8% bill increase
An O2 mobile phone store in Slough High Street, Berkshire (Maureen McLean) Virgin Media O2 mobile customers are set to hit with an 8.8% bill rise, the largest increase in in the UK telecoms market this year.
Most of the main operators have mid-contract bill rises written into contracts that are linked to the consumer prices index (CPI) measure of inflation for December, plus an added increase of 3.9 percentage points.
Last month, BT (BT-A.L), which owns mobile operator EE, Vodafone (VOD.L) and Three, unveiled a 7.9% increase in customers’ bills which will start from around April. Sky also announced an increase of 6.7%.
However, Virgin Media O2, which merged in 2021, follows the January rate of the higher retail price index (RPI) measure, plus an additional 3.9 percentage points. This means that a typical customer is facing an 8.8% increase in their bills from this Spring.
A spokesman for Virgin Media O2 said:
"We are investing heavily to ensure we continue to provide the fast and reliable connectivity our customers rely on, and the amount we receive from price increases is greatly outweighed by the £5m we invest every single day to upgrade our networks and services to give customers a better overall experience.
"It’s clear that we continue to offer excellent value, with customers paying less and receiving more.”
However, Rocio Concha, director of policy and advocacy at consumer group Which?, said:
This month’s RPI announcement will confirm the worst fears of O2 and Virgin Media customers who now face the biggest broadband and mobile price hikes by any major provider this April. This comes on top of a more than 17% increase last year. That’s a huge overall increase that most people would not have anticipated when they first took out their broadband or phone deal.”
Bitcoin hits $1 trillion valuation again
Illustration - bitcoin, cryptocurrency, investment, growth, decline, ETF, finance, economy, digital currency, value of bitcoin (CTK Photo/Petr Svancar (CTK, CTK) The value of bitcoin (BTC-USD) surged past $51,000 (£40,500) today, giving the world’s largest cryptocurrency a $1 trillion market capitalisation for the first time since December 2021.
It is the first time bitcoin has passed this level since the collapse of Sam Bankman-Fried’s now bankrupt trading platform FTX.
The rise comes amid increased confidence in the sector following the approval of crypto exchange traded funds in the US.
The value of bitcoin has surged by 130% over the last year.
UK rental prices rise 6.2%
Selly Oak, Birmingham, 4th February 2024 - Houses for rent in Selly Oak, Birmingham, England as the UK Housing Market continues to fluctuate. Credit: Stop Press Media/Alamy Live News (Stop Press Media) The Office for National Statistics has also revealed that UK rental prices rose by 6.2% in the year to January, staying at the fastest rate of growth since the measure was introduced in 2016.
It said:
Annual private rental prices increased by 6.1% in England, 7.0% in Wales and 6.8% in Scotland in the 12 months to January 2024.
Within England, London had the highest annual percentage change in private rental prices in the 12 months to January 2024, at 6.9%, while the North East saw the lowest, at 4.7%.
What happens if you miss a debt payment?
At this time of year, there’s a pretty good chance you’re carrying debts. Hargreaves Lansdown research shows that the average person who borrows to pay for Christmas will still have debt repayments due in February.
But with our finances stretched so thin, there will be some people for whom those payments are a step too far. In fact, 2.4 million people missed a payment of one sort or another in January this year, according to Which?.
So it’s worth understanding what happens if you do, and how you can protect yourself.
UK inflation holds steady at 4%
The UK rate of inflation unexpectedly remained unchanged at 4% in January, according to official figures.
Inflation, which measures how prices rise over time, stood at 4% in the year to January, said the Office for National Statistics.
It was the same as in December and came in below economists' expectations, including the Bank of England. Economists had expected prices to rise by 4.1% compared to the same month last year.
Keeping prices rising was the energy price cap, which rose in January, bringing up the cost of gas and electricity.
The new energy price cap meant the typical annual household bill went up to £1,928, an increase of £94.
However, higher energy prices were offset by falls in the cost of furniture and household goods, and food and non-alcoholic drinks.
Chancellor Jeremy Hunt said:
“Inflation never falls in a perfect straight line, but the plan is working; we have made huge progress in bringing inflation down from 11%, and the Bank of England forecast that it will fall to around 2% in a matter of months.”
Watch: How does inflation affect interest rates?
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