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Carney at odds over record-low UK inflation

In mid-morning trading the FTSE 100 is up five points, at 6860, as weak UK CPI figures push the London market higher.

Mark Carney
Source: Bloomberg

Mark Carney recently stated he would cut interest rates from their historic low if necessary, and now that UK inflation is at a record low he may be forced to fulfil his promise. Mr Carney won’t be in any rush to loosen the monetary policy, but the falling cost of living is an artificial wage boost for the British consumer.

Eurozone equities are in the red again as Greece’s instability increases, and the indebted nation is showing no sign of changing its tune. Yanis Varoufakis is keeping his poker face on and appears to be undeterred in his total inflexibility and unwillingness to compromise while the region gangs up on him.

InterContinental Hotels Group's shares are lower this morning even though the revenue per available room rose on the year. The hotel group’s figures were broadly in line with estimates, and the strong performance in the US and UK was the driving force behind the company’s results.

The 10% increase in full-year dividend will keep shareholders sweet, but Marcato Capital won’t be derailed from its merger plans.

Shares in John Wood Group were jolted higher after the oil services company revealed minor growth in full-year revenue and profits. The oil services company committed itself to increasing its dividend, but the cutbacks at major oil companies are yet to impact the Aberdeen-based company. 

The pound’s reaction to the record-low UK inflation was one of indifference as the slump in commodity prices is taking its toll on the cost of living. Today’s soft CPI figure reflects declining energy prices, and should not be mistaken for weak British demand. 

We are expecting the Dow Jones to open 60 points lower, at 17,960, as the US market re-opens after the Presidents Day long weekend. The toing and froing between Greece and Germany has put pressure on US index futures, but the Federal Reserve minutes tomorrow will take centre stage for the US market. 

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