Oil, defense stocks support FTSE 100 despite inflation shock
The FTSE 100 rose on Wednesday, lifted by energy and defense stocks, even as hotter-than-expected inflation data highlighted a severe cost-of-living crisis that has put the British economy at the risk of a sharp recession.
The exporter-heavy FTSE 100 inched 0.3% higher, with oil & gas stocks rising 1.2% on the back of higher crude prices.
UK’s aerospace and defense index jumped 2.7% following a blast in Poland at a grain facility near the Ukrainian border. Russia denied it was responsible.
U.S. President Joe Biden said the United States and its NATO allies were investigating the blast but early information suggested it may not have been caused by a missile fired from Russia.
Surging household energy bills and food prices pushed British inflation to a new 41-year high in October, according to data published a day before finance minister Jeremy Hunt is likely to announce tax hikes and spending cuts to control price growth.
Consumer prices rose by 11.1% in annual terms last month, while economists polled by Reuters had forecast the inflation rate would rise to 10.7%.
The pound was flat after hitting a three-month high in the previous session, while the domestically focussed FTSE 250 index slipped 0.3%.
Among individual stocks, Deliveroo Plc rose 1.2% after the food delivery company said it ended its operations in Australia.
Beazley Plc fell 5.4% after the insurer said it planned to raise 385 million pounds ($457 million) by selling new shares in the business, equivalent to a 10% stake.
Shares of Carnival Plc dropped 6.7% after the cruise operator said it was planning $1 billion convertible debt deal. (Reporting by Shashwat Chauhan and Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips)
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