UK Shop Prices Ease, FTSE and European Markets Tread Water
The FTSE 100 (^FTSE) and broader European markets showed little direction on Tuesday morning as UK shop price inflation slowed in October, according to fresh data from the British Retail Consortium and NielsenIQ.
Despite the overall slowdown, some categories saw notable price increases. Fresh food inflation jumped to 4.3% year-on-year, up from 4.1% in September, driven by higher prices for beef, poultry, and fruits. Meanwhile, overall food inflation eased to 3.7%, down from 4.2% the previous month, although prices remain elevated for consumers.
The moderation in costs was partly due to falling global sugar prices, which helped soften the blow for chocolate and confectionery buyers.
Clive Black of Shore Capital highlighted the wider economic impact of the easing: “This welcome dip in food prices could influence interest rates and may pave the way for a Bank of England rate cut sooner rather than later.” He also noted that with UK wage growth still above 4%, the real affordability of food remains solid, but higher-quality options will naturally come at a premium.
In the markets, London’s benchmark index hovered around the flatline in early trading. Meanwhile, continental Europe saw modest declines: Germany’s DAX (^GDAXI) fell 0.4% and France’s CAC (^FCHI) slipped 0.3%. The pan-European STOXX 600 (^STOXX) lost 0.3% overall.
Across the Atlantic, Wall Street was poised for a negative open, with S&P 500, Dow, and Nasdaq futures all indicating lower starts.
On the currency front, the British pound edged down 0.25% against the US dollar, trading at 1.3304.
For traders, the picture is mixed: easing inflation may relieve some pressure on consumers and policymakers, but market sentiment remains cautious as broader macro trends continue to influence equity and currency movements.
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