US inflation at 13-year high; Opec+ urged to pump more; Meggitt takeover battle lifts FTSE 250 to new peak – as it happened

By Financial24 Last updated Aug 12, 2021

Rolling coverage of the latest economic and financial news, as UK mid-cap index hits new peak and blue-chip FTSE 100 closes at 18-month high

Latest: US rival tries to gatecrash Meggitt takeover
Economist: US is now past peak inflation
US CPI sticks at 13-year high of 5.4%…but core inflation slows
Prices rose 0.5% during July, down from June’s 0.9%
White House urges Opec oil cartel to pump more

Earlier:

6.26pm BST

Time to recap.

Stock markets have rallied again amid signs that America’s inflation surge may have peaked, with the White House piling pressure on the Opec cartel to get its oil pumps working faster.

European markets close with records, 5 indices hit all-time highs:
STOXX Europe +0.42%
FTSE 100 +0.83%
DAX 30 +0.35%
CAC 40 +0.55%
FTSE MIB 30 +0.98%
Dow Jones also hits record +0.52% https://t.co/CiGCpRoDob pic.twitter.com/14JebvpIME

“The investing world was looking at the US CPI data for a lead on likely Fed policy and market direction but it came out bang in line with expectations at the headline level.

The focus will be on re-opening sensitive sectors to give a feel for how much of the upward pressure is transitory. For now, though, prices continue to rise, driven largely by supply constraints. Overall, however, inflation climbed at a more moderate pace, which will give the Fed’s current view some support.”

Inflation remains high at 5.4% (y/y), but the encouraging sign is monthly gains cooled in several areas
Used car prices had lowest gain since Feb. Airfare and laundry machines fell a bit in July vs June (though prices remain high)
Overall CPI
July gain: 0.5%
June 0.9%
May 0.6%

Owners' equivalent rent up 0.3% monthly for three consecutive months. If it continued at that rate for a full year, it would mean a component that accounts for ~24 percent of CPI rising at a 3.66% annual rate.

A couple of US CPI takeaways.
– Gasoline continues to rise. Clear why Biden wants to drive down prices
– Used vehicle inflation posted lowest price growth since Feb (0.2%). Excl. energy, used vehicles the only other double digit gainer YoY
– New vehicles continue to rise pic.twitter.com/GYCRC640Iu

At a critical moment in the global recovery, this is simply not enough,”

Gas prices have been climbing as people have jumped back in their cars and when you look at pressure points for July it’s right up there. And while a big chunk of the inflation basket hikes have come from expected avenues like airfares, hotels and used car sales, keeping a lid on household costs will be vital going forward.

Two days ago, the #IPCC told us to begin reducing emissions right now so that we have a chance of a livable future beyond 2050.
Today, @POTUS wants OPEC to produce more oil to stabilize the current economic energy market, decreasing the likelihood of that livable future. https://t.co/m5qkB32KRq

FULL STATEMENT: The White House urges OPEC+ to pump more oil (above and beyond the current 400,000 b/d monthly hikes the cartel is already implementing) | #OOTT pic.twitter.com/qnWA1l7Pnt

5.24pm BST

John Lewis is to open a 1m sq ft warehouse in Milton Keynes that will employ 500 people as it tries to meet surging demand for online shopping.

The new facility at Fenny Lock, which it has leased from Tesco for 11 years, will be John Lewis’s second biggest distribution centre after nearby Magna Park.