Yahoo Finance LIVE: Wall Street and FTSE higher ahead of key central bank rate decisions
Wall Street, the FTSE 100 and European stock markets were all in the green on Wednesday afternoon ahead of key interest rate decisions from the US Federal Reserve later and the Bank of England tomorrow.
The S&P 500 (^GSPC) was up 0.27% at 4,455.77 points, the tech-heavy NASDAQ (^IXIC) gained a marginal 0.07% to 13,687.69, while the Dow Jones (^DJI) rose 0.45% to 34,674.08, at the time of writing.
Investors were also digesting the latest UK economic data, which showed that inflation unexpectedly eased in the 12 months to August.
In London, at market close, the FTSE 100 (^FTSE) rose 1.00% to finish the session at 7,736.66 points. The CAC 40 (^FCHI) was 0.69% higher in Paris at 7,332.15 points, while Germany's DAX (^GDAXI) advanced 0.71% to close at 15,775.14.
According to the Office for National Statistics (ONS), UK inflation slowed to 6.7% in the year to August, down from July’s 6.8%, despite a rise in fuel prices.
Grant Fitzner, chief economist at the Office for National Statistics, said: "The rate of inflation eased slightly this month driven by falls in the often-erratic cost of overnight accommodation and air fares, as well as food prices rising by less than the same time last year."
This was partially offset by an increase in the price of petrol and diesel compared with a steep decline at this time last year, following record prices seen in July 2022.
Core inflation, which strips out energy, food, alcohol and tobacco, dropped to 6.2% – a sharp fall from the July figure, which came in at 6.9%.
Read more: Bank of England set for last interest rate hike but odds on pause rise
On the back of the news, the pound (GBPUSD=X) dropped to its lowest level in almost four months, down 0.4% against the dollar to $1.2345 – its weakest since late May.
Sterling is also now at its lowest level against the euro (GBPEUR=X) since early August.
UK housebuilders also rallied during the session, leading sectoral gains in London, as investors anticipated that mortgage rates may drop sooner than thought.
This came despite average house prices in Britain increasing by just 0.6% in the year to July 2023, down from a revised 1.9% in June 2023.
The ONS said prices increased 0.6% in England over the year to £309,000, and 0.1% to £192,000 in Scotland, while average house values in Wales decreased to £216,000, a fall of 0.1%
In Northern Ireland, property prices rose by 2.7% to £174,000 in the second quarter of 2023.
Meanwhile, private rental prices paid by tenants in Britain rose by 5.5% in the 12 months to August. This is up from 5.3% in the year to July and the highest rate since it started tracking this data in 2016.
Watch: How does inflation affect interest rates?
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