The most recent UK inflation figures had a little bit of every little thing, whether or not you’re a sunny optimist who thinks inflationary pressures are near peaking, or a cautious Cassandra who thinks we’re a good distance from escaping the cycle of rising costs.
“The headline quantity reached a brand new 40-year excessive of 9.4%, barely greater than anticipated, and manufacturing unit gate costs, typically a number one indicator for client costs as producers move on prices, hit their highest degree in 45 years.
“Nevertheless, extra encouragingly if you happen to strip out risky power and meals costs then core inflation truly eased again a contact.
“The FTSE 100 appeared to take the discharge in its stride regardless of hypothesis constructing that there will likely be a 50 foundation level enhance in rates of interest when the Financial institution of England subsequent meets in early August.
“Some higher outcomes from the US quarterly earnings season – together with Netflix, which wasn’t as dangerous as feared – have helped to spice up sentiment and led to sturdy positive factors on Wall Road final night time and in Asia right now.
“There was additionally an encouraging replace from Mr Kipling maker Premier Meals, which has been in a position to handle hovering enter prices by means of a mix of efficiencies and elevated costs whereas nonetheless constructing its market share.
“This presents some proof of name energy, though how lengthy Premier Meals can maintain its edge over rising costs stays to be seen.
“There’s solely a lot fats you possibly can trim off a enterprise earlier than you begin damaging its operational efficiency although, and regardless of that includes many family favourites, Premier Meals’s product portfolio isn’t resistant to the danger of customers buying and selling right down to cheaper grocery store own-brand alternate options.”
