UK Inflation Eases to 2.5%, Home Prices Rise 2%

Arthi Gupta
18 Sep, 2012
New York City

The UK indexes eased as the euro zone worries resurfaced. The UK annual inflation eased to 2.5% in August and home prices increased 2% annually in July.

[R]4:00 PM London – The UK indexes eased as the euro zone worries resurfaced. The UK annual inflation eased to 2.5% in August and home prices increased 2% annually in July.[/R]

The UK indexes dropped after annual inflation eased to 2.5% in August and investors worried that Spain’s lack of readiness to seek a larger bailout may worsen sovereign bond market.

Spanish treasury managed to sell debt that it targeted today at lower yields.

The Spanish government is resisting calls for a bailout from the euro zone on the worries that adding new austerity measures will create more pressure on unemployment and government tax receipts.

Ireland''s factory gate inflation rose in August

In London, the benchmark index FTSE 100 declined 30.43 or 0.5% to 5,863.06 and the pound edged lower to $1.6237.

UK Inflation Eases

The UK annual inflation eased to 2.5% in August, from 2.6% in July, data from the Office for National Statistics showed today.

The annual core inflation rate, excluding energy, food, alcoholic beverages and tobacco, fell to 2.1% in August from 2.3% in July.

From a month ago, the consumer price index climbed 0.5% in August, following a 0.1% rise in July.

Retail price inflation slowed to 2.9% in August from 3.2% in July.

Separately, UK home prices increased 2% annually in July, from a 2.3% rise in June, a survey report from the Office for National Statistics showed.

The year-on-year increase reflected growth of 2.4% in England, offset by declines in Scotland, Wales and Northern Ireland of 1.1%, 0.2% and 10.9% respectively.

Irish Factory Gate Inflation Rises

Ireland''s factory gate inflation rose in August, data released by the Central Statistics Office showed today.

The producer price index for the manufacturing sector increased 6% annually in August compared to the 4.5% gain in July.

On a monthly basis, factory gate prices increased 1% in August.

Gainers & Losers

Aviva plc, the insurer slumped 4.5% to 343 pence after a broker downgrade.

BT Group plc dipped 0.1% to 228.02 pence after the communication services provider appointed Luis Alvarez as chief executive officer of BT Global Services from October.

Debenhams Plc fell 0.3% to 99.15 pence after the retailer said profit before tax for the year is expected to be ahead of last year and in line with current market expectations.

G4S plc slid 0.3% to 266 pence after the security solutions provider purchased Sao Paulo-based Vanguarda Segurança e Vigilância.

Schroders plc declined 1.5% to 1,559 pence after the asset management company completed the acquisition of 25% interest in Axis Asset Management Company of India based Axis Bank Limited.