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Dec. 15, 2021, 10:10 a.m. EST

Pound steady while gilt yields rise after hotter-than-forecast UK inflation data

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By Steve Goldstein

The pound was steady while bond yields rose Wednesday after the release of faster-than-forecast U.K. inflation data.

Consumer prices rose 5.1% in the 12 months to November, ahead of the 4.8% forecast and a big jump from the 4.2% growth in October. The 5.1% reading also was ahead of the Bank of England’s forecast of 4.5%.

Markets were still hesitant to expect the central bank to lift interest rates from the current level of 0.1% on Thursday. “The reality is that without recent omicron developments, a rate hike would be nailed on at this meeting, given the recent U.K. data flow showing strong inflation and employment numbers. However, even the most hawkish member of the committee in Michael Saunders has sounded more balanced in recent days,” said Jamie Niven, senior fund manager at Candrian Asset Management.

“Our base case is that the [Monetary Policy Committee] will vote to keep the bank rate at 0.1%, adopting a ‘wait and see’ approach unitl more conclusive evidence on the new variant is revealed,” added Ellie Henderson, an economist at Investec.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1003% exchanged hands at $1.3225, drifting lower from $1.3231 on Tuesday as U.S. stocks began to trade.

The yield on the 2-year gilt /zigman2/quotes/211347169/realtime BX:TMBMKGB-02Y -0.27% rose 6 basis points to 0.495%.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.17% slipped 0.5% to 7,181.62 in afternoon trade. Rentokil Initial /zigman2/quotes/207510108/delayed UK:RTO +0.18% shares dropped for a second day, sliding 5% after announcing Tuesday its planned cash-and-stock offer for Terminix .

International Airlines Group /zigman2/quotes/208070069/delayed UK:IAG +0.12% dropped 3% after saying talks were at an advanced stage to terminate the planned acquisition of Air Europa, a deal that had run into antitrust scrutiny due to IAG’s control of Iberia.

DCC /zigman2/quotes/200539520/delayed UK:DCC -0.85% shares jumped 8% after reaching a $610 million deal to buy Philadelphia appliance distributor Almo Corp, a specialist sales company with revenue of $1.3 billion in fiscal 2021. DCC said adjusted earnings per share will jump 10% in its first full year of ownership.

/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.1972
+0.0012 +0.1003%
Volume: 0.0000
Nov. 28, 2022 7:15p
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/zigman2/quotes/211347169/realtime
add Add to watchlist BX:TMBMKGB-02Y
BX : Tullett Prebon
3.25
-0.0087 -0.27%
Volume: 0.00
Nov. 28, 2022 5:02p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,474.02
-12.65 -0.17%
Volume: 480,435
Nov. 28, 2022 4:59p
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/zigman2/quotes/207510108/delayed
UK : U.K.: London
549.20 p
+1.00 +0.18%
Volume: 2.88M
Nov. 28, 2022 4:35p
P/E Ratio
38.25
Dividend Yield
1.22%
Market Cap
£13.76 billion
Rev. per Employee
£66,625
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/zigman2/quotes/208070069/delayed
UK : U.K.: London
134.30 p
+0.16 +0.12%
Volume: 10.55M
Nov. 28, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£6.65 billion
Rev. per Employee
£232,926
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/zigman2/quotes/200539520/delayed
UK : U.K.: London
4,410.00 p
-38.00 -0.85%
Volume: 193,311
Nov. 28, 2022 4:35p
P/E Ratio
13.39
Dividend Yield
4.08%
Market Cap
£4.39 billion
Rev. per Employee
£1.37M
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