Sterling holds gains ahead of inflation reading
The pound remains above $1.30 this morning, having recently risen to its highest level since April 2022 on expectations for a pause in US interest rate hikes.
A half point increase in UK rates is still on the cards for next month, although much will depend on the outcome of Wednesday’s inflation reading.
The annual rate of inflation is forecast to fall from 8.7% to 8.3%, but with little change in core prices at around 7%.
The dollar index against six major currencies has been at a 15-month low, drien by last week’s softer-than-expected US inflation figure of 3%.
FTSE 100 seen lower after China GDP miss
European stock markets are facing a downbeat session after China posted a weaker-than-expected second quarter GDP figure of 6.3%.
The Shanghai Composite fell by more than 1% as the latest estimate of growth in the world’s second largest economy came in below forecasts of 7.3%. Markets in Hong Kong and Tokyo were closed today.
Further evidence of China’s faltering recovery from Covid lockdowns was also seen in the rate of annual growth in retail sales, which missed estimates after slowing to 3.1% in June from the 12.7% seen in May.
Having traded sharply higher last week, IG Index expects the FTSE 100 index to open 0.6% or 45 points lower at 7396.
Morning refresh: what you need to know to start the day
Good morning from the City desk of the Evening Standard.
Shares opened lower in China this morning after second-quarter GDP growth of 6.3% fell short of expectations. Analysts had expected growth to be as high as 7.3% according to a Reuters polls. The growth rate was up 0.8% on the first quarter.
In further signs a recovery of the Chinese economy had stalled, the youth unemployment rate rose to a new record of 21.3%. National Bureau of Statistics spokesperson Fu Linghui said youth unemployment could rise further yet before declining later in the year.
Here’s a look back at our top stories from Friday: