Although volumes have been low in the equity markets over the last couple of days, this morning’s healthy German ZEW economic sentiment report ensured that none of the major European exchanges slipped into the red today. Most of the European exchanges will have been mindful that tomorrow morning sees French, German and EU GDP figures released. They will be hoping to finally welcome the much-anticipated turning of the corner that European Central Bank chief Mario Draghi envisaged, even if it has come six months later than thought.
The FTSE 100 has taken its lead from the inflation figures for the UK released this morning. Both the consumer price index and the retail price index have fallen in line with expectations. Bank of England governor Mark Carney has again avoided having to write an open letter to the chancellor, as the CPI’s 2.8% is within the 1% limit of his 2% target. This does not represent any ground-breaking developments, but it does confirm the slow, steady improvements that have been made in UK economic data over the last couple of months. It would be a pity to spoil the happy mood that this has created, but with a deficit as large as the UK’s still to be tackled it is likely that the squeeze on consumer spending power could well get worse as the government struggles to reduce the balance.