A 50bp rate hike is looming in Britain

Investors breathed a sigh of relief yesterday, after Russia announced that it would restart gas flows via the Nord Stream 1 pipeline on Thursday, although there should be a reduction in capacity. Higher oil and commodity prices also contributed to send the FTSE 100 1% higher.

Strong corporate earnings in the US improved investor sentiment further. The London blue-chip index was up 0.5% this morning.

Following the strong UK job report for the second quarter, and data showing U.K. inflation accelerated to a 40-year high of 9.4% year-on-year in June, from 9.1% in May, the BoE governor said it would consider a 50bp rate hike.

Advertising firm WPP was up 2.7% after U.S. peer Omnicom Group posted stronger-than-expected quarterly results.

Royal Mail dropped 2.9% after it unveiled a 11.5% decline in quarterly sale in its UK arm, partly due to inflation.

 

Things to read today:

Rising fuel and food costs push UK inflation up to 9.4% (Financial Times)

Europe Rolls Out Plan to Ration Natural Gas if Russia Tightens Taps (WSJ)