FTSE 100 Live: US inflation set to fall to 8.7%, Elon Musk sells Tesla shares

(Evening Standard)

July’s inflation reading for the US economy is today expected to show a decline in the annual rate from 9.1% to 8.7%.

A bigger figure will trigger more Wall Street volatility, particularly if there are signs that price pressures have become entrenched.

Last night, Elon Musk revealed the sale of $6.9 billion of Tesla shares as part of a fundraising move in case a court forces the tycoon to complete his acquisition of Twitter.

FTSE 100 lower, Aviva and Admiral higher

08:31 , Graeme Evans

Shares in Aviva and Admiral are 4% and 6% higher respectively after the insurance comnpanies posted interim results today,

There was no such boost for Asia-focused Prudential, however, as its shares fell back 2% following its latest figures.

The FTSE 100 index declined 18.31 points to 7469.84, with other stocks on the blue-chip fallers board including JD Sports Fashion, Persimmon and Rightmove.

The FTSE 250 index weakened 59 points to 19,853.40, but TP ICAP and corporate merchandise firm 4imprint rallied 10% and 4% after their respective updates.

Royal Mail warns over strike impact

08:23 , Graeme Evans

Royal Mail today warned it will be “materially loss making” in 2022/23 if industrial action planned by the Communication Workers Union goes ahead on August 26 and 31 and September 8 and 9.

The company said it has offered an unconditional 2% pay increase backdated to 1 April, with a further 3.5% subject to agreement on business changes.

Last month, the company announced it was losing a million pounds a day and that the proposed pay deal would add more than half a million pounds a day to that figure.

In a statement today, Royal Mail said: “In more than three months of talks, CWU has failed to engage meaningfully on the business changes required.

“The negative commercial impact of any strike action will only make pay rises less affordable and could put jobs at risk.”

After announcing the strike action, CWU general secretary Dave Ward said that Royal Mail workers deserved a “dignified, proper pay rise”.

Royal Mail shares fell 4.1p to 262.3p.

US inflation in focus, FTSE 100 steady

08:00 , Graeme Evans

Investors will be hoping today’s US inflation reading for July marks the start of a decline in the annual rate, having peaked at 9.1% in June.

Forecasts suggest a figure of 8.7%, but Wall Street will also be looking for any signs that price pressures have become entrenched in the US economy.

The core inflation figure, which excludes energy costs, has posted three consecutive monthly declines since its peak in March but is forecast to move up to 6.1%.

A bigger-than-expected move in either direction is likely to have an impact on expectations for US interest rates, which currently stand in the region of 2.5%.

Another increase of 0.75% is forecast in September, but the increased threat of recession means Wall Street sees a slowing in the pace of rate rises after that.

China earlier revealed an inflation rate at a two-year high of 2.7% but this was below forecasts for a figure of 2.9%. Producer prices were lower than expected after a 4.2% year-on-year increase, easing fears about underlying inflation pressures.

Ahead of the US inflation figure, Wall Street futures are little changed after the Nasdaq fell 1.2% yesterday on the back of cautious updates from leading technology firms.

The FTSE 100 is poised to open 10 points lower at 7478, according to CMC Markets.