Yahoo Finance FTSE and Wall Street rise as UK inflation drops and US retail sales fall
How major markets are performing on Wednesday
The FTSE 100 (^FTSE) and European stocks pushed higher on Wednesday amid news that UK inflation dropped to a two-year low of 4.6% in the year to October and that US retail sales fell.
London's benchmark index climbed 0.6% on the day, boosted by a weaker pound, while the CAC 40 (^FCHI) in Paris gained 0.4%. In Germany, the DAX (^GDAXI) advanced 0.8% and the Stoxx 600 (STOXX) rose 0.4%.
The Office for National Statistics (ONS) revealed that the UK’s consumer prices index (CPI) index dropped in October from 6.7% the month before. It was the lowest rate of price increases in two years and the bigger-than-expected fall is set to provide some relief to UK households gripped by the cost of living crisis.
Core CPI, which strips out energy, food, alcohol and tobacco, rose by 5.7% in the 12 months to October, down from 6.1% in September.
The prime minister pledged at the start of the year to halve inflation to below 5.4% by the end of 2023. Inflation was at 10.7% in the three-month period between October and December 2022.
The pound (GBPUSD=X) tumbled against the dollar on the back of the news, down as much as third of a cent to $1.246, dropping from levels last seen in September.
It comes as traders are less concerned that the Bank of England will raise interest rates further to fight inflation.
Meanwhile, homebuilders are the largest gainers on the FTSE adding 2%, while the banks sector gained as much as 1.6%.
Precious metal miners added almost 2%, while industrial metal miners were up as much as 1.8%, as prices of most metals rose on a softer dollar and falling bond yields.
Read more: UK wages grow faster than inflation
The positive session follows strong gains in Asia and on Wall Street last night, where investors cheered the drop in US inflation to just 3.2% last month.
By the time of the European close, the Dow Jones (^DJI) advanced 0.2% and the S&P 500 (^GSPC) rose 0.2%. The tech-heavy NASDAQ (^IXIC) gained 0.3%.
US retail sales declined for the first time since March, down 0.1% in October compared to the previous month. However, the figure was better than the 0.3% fall economists expected.
The Commerce Department added that September’s retail sales figures were also revised upwards to show a 0.9% rise instead of the 0.7% first reported.
Watch: UK inflation drops sharply as PM says pledge has been ‘delivered’
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