FTSE 100 opens higher after inflation rise not as steep as City feared
08:29
London's FTSE 100 is set for a fourth straight rise today after the first rise in annual inflation this year failed to dent prospects for two interest rate cuts by the Bank of England this year.
Britain’s main stock index rose nearly 50 points in opening trade to 8,282.38, up 0.6%. With the market also pricing in two quarter-point interest rate cuts from the Bank of England this year – which would take the core cost of borrowing to 4.75% – shares in companies set to benefit rose.
Rightmove, the online property portal which is well positioned to benefit from a more buoyant housing market, rose 8p to 545p. Persimmon, the housebuilder, rose 20p to 1,630p. Barclays, a major mortgage lender, rose 3p to 222p.
The key measure of the cost of living, the consumer price index (CPI), rose 2.2% in July, compared with a rise of just 2% in June. The increase had been expected to rise to 2.3%, with most City analysts saying the smaller-than-expected rise is unlikely to delay a further rate cut.
,
Higher premiums help FTSE 100 insurer Aviva beat profit expectations
07:36 , Michael Jager
Higher premiums helped FTSE 100 insurer Aviva post better-than-expected half-year profits.
Operating profit came to £875m, up 14% and above forecasts of £830m. It also raised its interim dividend by 7% to 11.9p a share.
According to the company, premiums in the general insurance division rose 15% to more than £6 billion.
Sales of pension products were lower, from £3.223bn to £3.036bn. The fall was due to a “contraction in the Equity Release market” and a £100m drop in sales of “bulk purchase annuities”, the deals companies make when they spin off their pension schemes, which amounted to £2.3bn in the period.
Amanda Blanc, Group CEO, said:
“We remain very positive about Aviva's prospects. Trading conditions in the UK, Ireland and Canada are excellent. And the UK market, our largest, is very attractive and growing.”
The annual inflation rate rose from 2% to 2.2% in July
07:23 , Jonathan Prynn
Annual inflation rose last month for the first time this year, but not as much as some meteorologists in the city had feared.
The key measure of the cost of living, the consumer price index (CPI), rose 2.2% in July, compared with a rise of just 2% in June, according to official figures from the Office for National Statistics (ONS).
However, inflation was expected to rise to 2.3%, so the smaller-than-forecast increase is unlikely to delay a further rate cut. Inflation last rose in December 2023, when the CPI rose from 3.9% to 4%.
According to the ONS, the main reason for the rise in inflation is that gas and electricity prices did not fall as much as in the same month last year.
Darren Jones, Chief Secretary to the Treasury, said: “The new Government is under no illusions about the scale of the challenge we have inherited, with many families still struggling with the cost of living. That is why we are now taking the difficult decisions to repair the foundations of our economy so we can rebuild Britain and leave every part of the country better off.”
FTSE 100 set for further gains as positive sentiment continues after rise in inflation
07:16 , Michael Jager
London's main stock market index is set to rise further at the opening of trading, a move that would mark the index's fourth consecutive day of gains.
The positive mood that emerged after July inflation figures showed an increase for the first time in more than six months.
The consumer price index for July rose to 2.2% for the month, up from 2% in June. This was the second consecutive reading that was exactly in line with the Bank of England's official target.
After the figures were released, futures trading remained positive, up about 35 points.
Summary: Yesterday's Most Important Stories
06:52 , Simon Hunt
Good morning from the Standard City counter.
Here is a summary of yesterday's top headlines:
