Stocks flat after CPI report

In London equities are broadly unchanged following the release of the UK’s latest inflation report.

The rate of inflation in the UK climbed to 2.9% in June, from 2.7% in May. Analysts were expecting a reading of 3%, however, so the cost of living isn’t rising as fast as had been predicted. Though the Bank of England has an inflation target of 2%, it is more focused on economic growth and therefore not likely to curtail its stimulus package in the near future. 

Mining giant Rio Tinto has announced a record production level in iron ore for the first half of 2013, and also reiterated its full-year iron ore production target. The stock is up 2.2% this morning.

Glencore Xstrata on the other hand stated it is going to exit the iron ore business in Australia, citing deteriorating market conditions. The Swiss-based company’s stock is off 0.3%.

The US inflation level is announced at 1.30pm (London time). Economists are expecting a reading of 0.3%; if the cost of living comes in much higher there could be fears that the US will taper its QE stimulus package.

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