Closing summary
The FTSE 100 index in London is scaling new peaks, currently 1% higher at 9,283.20, shrugging off higher-than-expected inflation data released first thing this morning.
Inflation rose to an annual rate of 3.8% in July from 3.6% in June, driven by higher air fares, petrol and diesel, and food prices, while the expected “Oasis effect” on hotel prices did not materialise.
On Wall Street, the tech-heavy Nasdaq has lost 1.3%. Traders are waiting for more clues on interest rate policy from the Federal Reserve’s Jackson Hole symposium, which starts tomorrow. Fed chair Jerome Powell is due to speak on Friday
Ministers have lined up special managers to run Liberty Steel’s South Yorkshire operations if they are put into administration, according to a dramatic revelation at London’s high court.
The development shows the government is ready to step in immediately to secure the continued operations of the Speciality Steel UK (SSUK), which employs 1,450 people at the group’s operations at an electric arc furnace in Rotherham and another plant in Stocksbridge, both in South Yorkshire.
Creditors to SSUK are seeking a compulsory winding up order, the high court heard on Wednesday. The company asked to adjourn the hearing to buy time to try to agree a “pre-pack” administration that would allow its owner, the metals tycoon Sanjeev Gupta, to keep control of the insolvent company.
Counsel representing the creditors showed the judge a letter from the Department for Business and Trade detailing that the government had said its official receiver was ready to carry out a sales process if the company entered administration.
Thank you for reading. We’ll be back tomorrow to bring you the latest news. Take care – JK
Markets are expecting the Fed to cut rates at its next meeting in mid-September.
However, Atakan Bakiskan, US economist at Berenberg Bank, is forecasting no change. What can we expect at Jackson Hole? He said:
Jackson Hole or black hole? The annual Jackson Hole conference – running from tomorrow through Saturday – has often served as a platform for Federal Reserve Chair Jerome Powell to deliver clear signals on upcoming monetary policy moves. Powell is scheduled to speak at 10am EST on Friday.
This year may prove different due to the unusual series of events and persistent uncertainty that have unfolded since Donald Trump took office in January. Recent economic data offers no clear direction for the federal funds rate. One the one hand, core CPI inflation rose to 3.1% yoy as of July (up from 2.8% yoy in March).
On the other hand, job growth slowed sharply, even as the labour market remains broadly balanced. Powell may avoid sending a definitive message and instead stress the importance of August inflation and employment reports in shaping the next rate decision. Both will be released before the 17 September meeting.
If Powell sounds less dovish than markets expect, front-end [bond] yields will likely rise and traders will trim their September rate cut expectations. We maintain our call for no Fed rate cut in September. Of course, the risks to our non-consensus call tilt to the downside. A weak August jobs report could force the Fed to cut even in the face of elevated inflation.
While the FTSE 100 index is now almost 1% ahead, or 91 points, at 9,279, having hit a new all-time high of 9,283.2, Wall Street has opened lower.
The tech sell-off continues state-side amid concerns about the future of the AI boom, pushing the Nasdaq down by 1%.
The dollar has slipped 0.1% against a basket of major currencies, as Donald Trump called on Federal Reserve governor Lisa Cook to resign.
Traders are waiting for more clues on interest rate policy from the Fed’s Jackson Hole symposium, which starts tomorrow.
Here’s our full story on Liberty Steel:
FTSE 100 index hits fresh record high
The UK’s FTSE 100 index of leading shares has hit a fresh record high, after dipping earlier on the surprisingly high inflation reading for July.
The index rose as much as 0.67% to hit an all-time high of 9,250.88.
Meanwhile, the German and Italian stock markets have fallen by 0.4% and 0.3% respectively while the French bourse has edged 0.1% higher.
Updated
Ministers prepare special administration for Liberty Steel’s Yorkshire plants
The government has lined up special managers to run Liberty Steel’s South Yorkshire operations if it is put into administration, according to a dramatic revelation at London’s high court, report Jasper Jolly and Priya Bharadia.
London’s high court heard on Wednesday heard that creditors to Speciality Steel UK (SSUK), part of Liberty Steel, were seeking a compulsory winding up order. The company asked to adjourn the hearing in order to try to agree a “pre-pack” administration that would allow its owner, metals tycoon Sanjeev Gupta, to keep control of the insolvent company.
Counsel representing the creditors showed the judge a letter from the Department of Business and Trade detailing that the government had said its official receiver was ready to carry out a sales process if the company entered administration.
The insolvency and companies court judge Sally Barber said she was minded to give two weeks of extra time to decide what the consequences of each course would be. However, after a short pause, the creditors’ counsel then disclosed that lawyers for the government were present in the court. The barrister said he had just been informed that an application for the appointment of a special manager to carry out the administration had already been prepared in draft form.
The existence of a draft application suggests that the government is ready to step in immediately to secure the continued operations of SSUK. SSUK employs 1,450 people at the group’s operations at an electric arc furnace in Rotherham and another plant in Stocksbridge, both in South Yorkshire.
The court is expected to grant a short adjournment of a to give the parties time to provide evidence to the court of what will happen in either case.
Updated
No sign of Oasis effect in inflation data
Returning to today’s UK inflation surprise… Hotel prices – which many expected to surge amid the Oasis tour, similar to the Taylor Swift tour last summer – barely increased in July.
Economists at Goldman Sachs noted:
There was little evidence of a notable impact from the Oasis tour, with one night hotel prices in the North West rising only moderately.
James Smith, UK economist at ING, said:
UK inflation was undoubtedly hot in July, but as ever, the devil lies in the detail.
Services inflation – the bit usually most relevant for the Bank of England – rose to 5% from 4.7%. That was enough to drag core inflation up slightly too. But this was overwhelmingly down to a larger-than-usual rise in airfares. These are particularly volatile in July, depending partly on when the survey date falls relative to the start of school holidays.
These are things the Bank of England can safely ignore. We calculate the Bank’s preferred measure of services inflation, excluding volatile/indexed categories, to be essentially flat in annual terms. And at 4.2%, this measure is a fair bit below overall services inflation.
But that doesn’t mean the central bank will relax entirely, he said. Officials are keeping an unusually keen eye on food inflation right now – and this picked up further to 4.9%, from 2% at the end of last year. The Bank expects it to rise above 5% by year-end. However, Smith thinks concerns around services inflation and household inflation expectations
are overblown, not least because the cooling jobs market should exert further downward pressure on wage growth in the second half of 2025. And when it comes to services, we think inflation will be a little more benign than the BoE’s forecasts predict. Partly that’s because rental inflation should slow considerably as the year progresses; we saw more signs of that in July’s data, on account of less aggressive social rent rises.
That all leads us to think a November rate cut is still more likely than not, though it’s not a particularly high conviction call right now given the very evident division on the rate-setting committee. Much also hinges on the jobs market, where employment has fallen in eight out of the past nine months, but where the survey data is looking a little less worrisome than it did earlier this year.
For now, we expect a rate cut in November to be followed by two further moves next year.
Updated
Holly Willoughby's Roxy Media given more time at insolvency hearing
The television production company set up by Holly Willoughby and her husband has been given more time to avoid being wound up over an unpaid tax bill.
HM Revenue and Customs filed a winding up order against the production company, Roxy Media, in early February, after the business allegedly failed to pay £377,000 in tax earlier this year.
The tax authority said the company submitted an appeal after the deadline. The company claimed that was due to negligence by previous accountants. This amount has since been settled, the high court heard in April.
At an insolvency hearing at the Rolls Building in London on Wednesday, Roxy Media’s legal team said they were seeking a dismissal of the case, and that HMRC had been aware that a new accountant had been appointed. Insolvency and Companies Court Judge Barber said she was not yet minded to dismiss the case, and adjourned it for 12 weeks.
Roxy Media was set up in 2008 by Willoughby and her husband, Daniel Baldwin. The company deals with “television programme production activities”, according to its listing on Companies House.
It was the fourth hearing on the matter. The case at the high court has been adjourned for 12 weeks and will recommence on 12 November.
Willoughby was approached for comment.
Updated
Shower gel ad gets UK ban for suggesting black skin is problematic
A television advert for Sanex shower gel has been banned in the UK for appearing to suggest that black skin is “problematic” and white skin is “superior”.
The Advertising Standards Authority (ASA) acted after investigating two complaints that the advert fed negative stereotypes about people with darker skin tones.
The ad, broadcast in June, included a voiceover that said: “To those who might scratch day and night. To those whose skin will feel dried out even by water,” alongside scenes of a black woman with red scratch marks and another covered with a cracked clay-like material.
The ad then showed a white woman taking a shower with the product, and stated: “Try to take a shower with the new Sanex skin therapy and its patented amino acid complex. For 24-hour hydration feel.” It ended with text and the voiceover stating: “Relief could be as simple as a shower.”
Updated
CrossCountry passengers face strike disruption on bank holiday weekend
Rail passengers have been warned that a strike by rail workers could disrupt services amid the bank holiday weekend rush, when transport networks are expected to be packed with holidaymakers.
Members of the Rail, Maritime and Transport (RMT) union at the operator CrossCountry are taking industrial action on Saturday 23 August and bank holiday Monday over pay and conditions.
The company – whose network centred around Birmingham runs to cities across Great Britain from Aberdeen in the north to Cornwall in the south – said it would offer a reduced timetable over the weekend, with no services on Saturday, and cancellations expected across all routes on Sunday.
It comes as Visit England has reported that more than 11 million Britons are definitely planning an overnight trip in the UK over the bank holiday break in England and Wales, which would mark an increase on the same weekend a year earlier.
Eurozone inflation stable at 2% in July
Inflation in the eurozone was 2% in July, the same as in June.
Eurostat, the European Union’s statistics office, confirmed the figure in its final estimate for the month. In the EU, inflation ticked up to 2.4% from 2.3% in June.
The lowest annual rates in the EU were registered in Cyprus (0.1%), France (0.9%) and Ireland (1.6%). The highest annual rates were recorded in Romania (6.6%), Estonia (5.6%) and Slovakia (4.6%).
The highest contribution to the annual euro area inflation rate came from services, followed by food, alcohol & tobacco, and non-energy industrial goods.
Here’s our full story on the expected increases in rail fares in England next year.
UK house price rises accelerate while rent increases slow
UK house price rises have accelerated while rent increases slowed, according to official figures.
The average house price rose by 3.7% to £269,000 in the 12 months to June, up from an annual growth rate of 2.7% in May.
Average monthly private rents increased by 5.9% to £1,343 in July; this growth rate is down from 6.7% in June but still high.
Average rents increased to £1,398 (6.0%) in England, £807 (7.9%) in Wales, and £999 (3.6%) in Scotland, in the 12 months to July. In Northern Ireland, average rents increased to £855 (7.4%), in the 12 months to May.
In England, private rents annual inflation was highest in the North East (8.9%) and lowest in Yorkshire and The Humber (3.5%), in the 12 months to July.
Average house prices increased to £291,000 (3.3%) in England, £210,000 (2.6%) in Wales, and £192,000 (5.9%) in Scotland, in the 12 months to June.
Average UK:
— Office for National Statistics (ONS) (@ONS) August 20, 2025
• house prices increased by 3.7%, to £269,000, in the 12 months to June 2025, up from 2.7% in the 12 months to May
• monthly private rents up by 5.9%, to £1,343, in the 12 months to July 2025, down from 6.7% in the 12 months to June
➡️ https://t.co/FZaF6ImGIY pic.twitter.com/547R2YhUcg
Nick Leeming, chairman of the estate agent Jackson-Stops, said:
An uplift in house prices reflects a quiet but steady confidence in the market, as we continue to move further away from the turbulence of recent economic events.
Buyers are increasingly focused on the tangible realities of today’s housing landscape, rather than being distracted by speculation or uncertainty. There remains a healthy level of housing stock available, yet competition for well-priced, quality homes is driving swift sales from committed buyers.
The Treasury is considering a new tax on the sale of homes worth more than £500,000 as a step towards a radical overhaul of stamp duty and council tax – a Guardian exclusive from my colleagues Anna Isaac and Peter Walker on Monday. Leeming said:
While rumoured changes to stamp duty suggest the Treasury is open to bold, out-of-the-box thinking to improve market dynamics, these ideas remain speculative for now. Until concrete action is taken, they are simply words, not policy. Our recent research revealed that of the 15% of over 55s who plan to downsize would do so within the next year if stamp duty were removed or reduced on their onward purchase.
Encouragingly, the recent cut to the base rate to 4% has brought fixed-rate mortgages comfortably below 5%, restoring buyer affordability to levels not seen since 2022. This is a welcome development, especially as millions of homeowners approach the end of their fixed-rate deals this year and are considering what to do next.
European shares retreat from five-month high as technology and defence stocks fall
European stock markets have slipped today, retreating from the five-month closing high on Tuesday, as technology and defence stocks fell.
The pan-European Stoxx 600 index, which comprises Europe’s leading companies, fell by 0.4% in early trading and is now down 0.1%.
Following a tech sell-off on Wall Street on Tuesday, triggered by warnings over the future of the artificial intelligence boom, the Stoxx Europe 600 technology index fell by almost 1% in early trading, and is now down 0.4%.
The defence sector declined for a second day, tumbling 1.5% in early trade and now 0.4% lower, as news of a potential Ukraine-Russia summit raised hopes of a peace deal, which could reduce demand for military assets. France’s Thales fell by 0.6%, Germany’s Rheinmetall slipped by 0.4% and the UK’s BAE Systems lost 0.5%.
Details are sketchy though, despite talks at the Oval Office on Monday between the US and Ukrainian presidents and other European leaders. Donald Trump said Washington might provide air support to Ukraine as part of a peace deal, but ruled out putting troops on the ground.
The FTSE 100 index in London dipped by 0.1%, or 10.6 points, to 9,178 after UK inflation accelerated more than expected in July to 3.8%, the highest annual rate since early 2024, with transport and food costs rising sharply.
Here are 10 examples of potential rail fare rises in England next year, compiled by PA.
Figures are based on an increase of 5.8%. The table compares the cost of season tickets using any valid route bought before and after the rise.
Annual season tickets:
ROUTE - PREVIOUS PRICE - PRICE AFTER 5.8% RISE - INCREASE
Woking to London - £4,260 - £4,507 - £247
Gloucester to Birmingham - £5,384 - £5,696 - £312
Whitehaven to Carlisle - £2,508 - £2,653 - £145
York to Leeds - £3,028 - £3,204 - £176
Bournemouth to Southampton - £3,676 - £3,889 - £213
Flexi tickets for travel two days per week over a year:
Welwyn Garden City to London - £2,029.20 - £2,146.90 - £117.70
Liverpool to Manchester - £2,074.80 - £2,195.10 - £120.30
Cambridge to London - £4,620 - £4,888 - £268
Ipswich to Peterborough - £4,947.60 - £5,234.60 - £287
Bath Spa to Bristol Temple Meads - £1,056 - £1,117.20 - £61.20
Some economists now expect interest rates to be on hold this year, while the EY Item Club forecasting group says November is a ‘close call’.
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said:
All told, July’s consumer prices report showed headline inflation matching the monetary policy committee’s (MPC) forecasts, as outlined in the August monetary policy report (MPR).
Services inflation exceeded the MPC’s expectations, but that jump in services consumer prices index (CPI) was partly driven by a sharp move in the erratic airfares component, which could unwind in August’s data. That said, the doves on the MPC have taken a battering over the past week. July’s figures show sticky underlying services inflation and are another blow to those on the MPC that argued hard at the August meeting about the disinflationary process being underway.
What’s more, the prices data come on the back of a GDP report that smashed consensus estimates, and a labour market report that showed the jobs market stabilising. It is also easy to forget that inflation in July was also well above the MPC’s expectations just a few months ago in the May MPR for instance, which projected headline inflation of 3.4%, and services CPI of 4.7%. T
The big picture remains that inflation is set to stay miles above target for the foreseeable future; we expect headline inflation to remain above 3% until April 2026, forcing the MPC to stay on hold for the rest of this year at least.
Matt Swannell, chief economic advisor to the EY Item Club, said:
Base effects mean CPI inflation is likely to edge up further over the next couple of months and peak in September. Subsequently, inflation should cool gradually. The positive contribution from the energy category is expected to fade towards the end of this year and into next. Meanwhile, food price inflation should slowly cool, as the impact of stronger sterling gradually feeds through. Though services inflation is likely to remain sticky in the near-term, it will start to soften next year, as pay growth continues to cool and the impact of businesses passing on this year’s increase in employers’ National Insurance Contributions (NICs) fades.
In the minutes of its August meeting, the MPC sent a clear message that inflation was its priority again. However, there wasn’t much in today’s release that should add to the committee’s concerns, with headline inflation in line with the Bank of England’s staff projections and its measure of underlying services inflation softening. November’s meeting will be a close call, with the hawkish shift at the August meeting leaving much greater uncertainty around the timing of the MPC’s next cut.
Updated
The chancellor of the exchequer, Rachel Reeves, conceded that “there’s more to do to ease the cost of living”.
She said:
We have taken the decisions needed to stabilise the public finances, and we’re a long way from the double-digit inflation we saw under the previous government, but there’s more to do to ease the cost of living.
That’s why we’ve raised the minimum wage, extended the £3 bus fare cap, expanded free school meals to over half a million more children, and are rolling out free breakfast clubs for every child in the country. Through our plan for change we’re going further and faster to put more money in people’s pockets.
The Unite union called for higher pay rises, to offset higher inflation.
Unite general secretary Sharon Graham said:
Once again, the soaring cost of basic essentials like food and water is pushing families to the brink. Workers and their families are struggling to pay excessive bills. Pressure needs to be taken off family budgets by giving workers a pay rise. The time for action is now.
Updated
Inflation in the UK is running higher than in the US, where it held at 2.7% in July, and in the eurozone, where it is at 2% and is expected to remain around that level – in line with the European Central Bank’s target – in the coming years.
Inflation in the UK’s dominant services sector, which is closely watched by the Bank of England, accelerated to 5% in July from 4.7% in June.
Our full story is here:
Updated
Expectations of Bank of England rate cut this year recede
The rise in inflation has all but wiped out hopes of a September interest rate cut.
Financial markets see a less than 5% chance of a reduction then.
Chances of another rate cut from the Bank of England before the end of the year have also receded, and the next quarter-point reduction is only fully priced in next spring. The central bank last cut rates earlier this month by a quarter point to 4% but only after a narrow 5-4 vote by policymakers on the monetary policy committee.
The pound gained by 0.1% against the dollar to $1.3511 after the inflation data.
Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said:
These figures underscore the intensifying financial squeeze on households and businesses as a summer holiday spike in food and flight costs helped push inflation uncomfortably higher, despite July’s drop in energy bills.
Increasing services inflation suggests that rising National Insurance and National Living Wage costs are exacerbating underlying price pressures by more than offsetting the current downward squeeze from looser labour market conditions.
While spiralling business costs and food prices may mean that inflation peaks higher than the Bank of England’s prediction of 4%, it should start decelerating in the autumn as a weaker economy increasingly bears down on prices.
July’s outturn probably extinguishes hope of a September interest rate cut, while strengthening underlying inflationary pressures calls into question whether policymakers will be able to relax policy again this year.
Updated
Jim Bligh, director of corporate affairs and packaging at the Food and Drink Federation (FDF), warned that” high food and drink inflation will persist through the year”.
He said food and drink manufacturers are being squeezed by higher energy and ingredient costs and have no choice but to pass some of the increases on to customers.
Today’s figures show that food and drink manufacturers are being squeezed on all sides. Energy prices remain high, and the cost of some key ingredients has surged in recent years. Cocoa prices are at a 45-year high, and both olive oil and butter prices have doubled since 2020.
With high commodity prices, the new £1.4bn packaging tax, and increased National Insurance costs, it’s no surprise that many food and drink manufacturers have seen their costs increase by 10% or more this year.
Manufacturers have absorbed as many of these costs as possible, but consumers will still see higher prices at the till. We expect that high food and drink inflation will persist through the year, so any fresh costs for businesses in the Autumn Budget will inevitably put yet more pressure on shoppers’ pockets.
Five categories saw inflation in double digits: beef and veal (24.3%), coffee (18.0%), butter (17.8%), chocolate (17.2%) and whole milk (11.3%).
Prices fell the fastest for: olive oil (-10.6%), sugar (-2.8%), frozen seafood (-2.6%), and rice (-2.5%).
Wholesale UK butter prices are doubled compared to Jan-20
Food prices rise at highest rate since February 2024
Food prices rose at the highest rate since February 2024 (but below the peak seen in early 2023), with beef and fresh orange juice among the items that became more expensive.
Food prices rose by 4.9% in July, up from 4.5% in June.
Statisticians said there were price rises for meat (mainly beef); sugar, jam, honey, syrups, chocolate and confectionery (mainly chocolate assortments); coffee, tea and cocoa (mainly instant coffee); and mineral waters, soft drinks and juices (mainly fresh orange juice).
Rail fares in England on track to rise by as much as 5.8% next year
Rail fares in England are on track to rise by as much as 5.8% next year, sparking concern among passenger groups.
Increases in rail ticket prices are usually calculated by adding one percentage point to July’s inflation reading on the retail prices index (RPI), which was 4.8%. The government has not confirmed how it will determine the cap on regulated fare rises in 2026, but this year’s 4.6% hike was one percentage point above RPI in July 2024.
Regulated fares, which account for about half of rail journeys, would rise by 5.8% in 2026 if the increase follows the same pattern as last year.
Updated
Air fares jump due to timing of school holidays; petrol and diesel prices also rise
Air fares rose by 30.2% between June and July, compared with a monthly rise of 13.3% a year earlier.
The increase is the biggest July increase since the collection of air fares changed from quarterly to monthly in 2001, and was probably influenced by the timing of school summer holidays.
Petrol and diesel prices also rose, with the average price of petrol up by 2p a litre between June and July while diesel rose by 2.9p a litre, compared with price declines in the same period last year.
Commenting on today’s inflation figures for July, ONS Chief Economist Grant Fitzner said: (Quote 1 of 2) 💬 pic.twitter.com/4jY3AD9Lva
— Office for National Statistics (ONS) (@ONS) August 20, 2025
Updated
UK inflation accelerates to 3.8% on higher air fares, petrol and food prices
UK inflation has accelerated more than expected to 3.8% in July, the highest annual rate since early last year, driven by higher transport costs, such as air fares, and food prices.
It’s the second month in a row that inflation has surprised on the upside.
It compares with an annual increase in the consumer prices index of 3.6% in June, according to the Office for National Statistics.
The core rate, which strips out food and energy, rose to 3.8% from 3.7%, also higher than expected.
The Consumer Prices Index (CPI) rose by 3.8% in the 12 months to July 2025, up from 3.6% in the 12 months to June 2025.
— Office for National Statistics (ONS) (@ONS) August 20, 2025
Read the full article ➡️ https://t.co/ov0MVp67yF pic.twitter.com/YDe3JQ7zGY
Grant Fitzner went on to say: (Quote 2 of 2) 💬 pic.twitter.com/OQ4usK5vwZ
— Office for National Statistics (ONS) (@ONS) August 20, 2025
Updated
Introduction: UK inflation data expected to show further rise on higher food and energy prices
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
It’s UK inflation day.
Inflation is expected to have edged higher to an annual rate of 3.7% in July, underlining the challenge faced by the chancellor, Rachel Reeves.
In June, the annual change in the consumer prices index unexpectedly accelerated to 3.6%, driven by fuel and food prices. The figures are due to be released at 7am by the Office for National Statistics.
Core inflation, which excludes energy and food (which tend to be volatile), is expected to have stayed at 3.7%.
Investec economist Sandra Horsfield has looked at the broader picture.
The direction of travel in UK inflation has not been welcome as of late: having dipped below the 2% target in September 2024, the trend since has pointed firmly upwards, with overall CPI inflation touching 3.6% year-on-year in June. The picture is less stark on the ‘core’ CPI measure (excluding food, energy, alcohol and tobacco) but still not helpful: on that basis, inflation rose from 3.2% to 3.7% between the same two months.
The broad story underlying this is that food prices have accelerated and what was a significant year-on-year fall in energy prices has largely ended. And whereas services inflation has eased, its fall has been relatively modest and not sufficient to offset the re-acceleration in non-industrial goods prices (labelled ‘core’ goods by the BoE). It is no wonder then that the Bank of England has become less sure that prospects for disinflation are firm enough to allow for further rate cuts at the same pace as over the past year.
Turning to the July figures, she expects little by way of reassurance for the monetary policy committee. While the Oasis tour may have pushed up hotel prices in July and August, similar to the Taylor Swift tour in June 2024, this should unwind in September. UK ticket sales over the tour were similar, at 1.38m versus 1.2m.
On the food price rise, indications are that price pressures built further for certain items such as beef that have added substantially to the pace of overall food price inflation rises. Energy price inflation too looks to have risen, swinging from negative to positive year-onyear rates, largely on petrol price changes.
On the core side, though, we see a more benign underlying trend than the numbers are likely to show… We think clothing prices in spring/summer ranges could have seen less discounting than usual in July the unusually hot weather this year. Again, this should unwind once the sales period is over.
By contrast, the eurozone’s inflation rate for July is likely to be confirmed at 2% later today.
On Wall Street, US tech stocks sold off yesterday amid warnings over the future of the artificial intelligence boom. A report from the Massachusetts Institute of Technology said “95% organisations are getting zero return” from their investments in generative AI.
The tech-heavy Nasdaq finished the day 1.46% lower, its biggest one-day decline since the start of August. The chipmaker Nvidia fell by 3.5% while the software group Palantir slumped by 9.4% and chip designer Arm lost 5%.
Asian markets followed in Wall Street’s footsteps, with Japan’s Nikkei down by 1.55% and Taiwan losing nearly 3%.
The Agenda
10am BST: Eurozone inflation for July (final)
