As the U.K. inflation rate remained stubbornly high and signs of further monetary tightening emerged, European stock market traded substantially lower on Wednesday. At the same time, efforts to increase the United States borrowing ceiling made little headway.
The headline inflation rates in the U.K. fell less than anticipated in April, from 10.1% to 8.7%. According to data released earlier on Wednesday. However, core inflation, which includes volatile food & energy prices, shot up to 6.8 percent, a 31-year high.
These numbers demonstrate how difficult it is to control inflation in the United Kingdom. Despite the Bank of England’s lengthy cycle of tightening, which led to a further increase early this month. The central bank anticipates increasing rates of interest once more the next month, probably to 4.75 percent from 4.50 percent to 4.75%.
In addition to leading the festivities for the central bank’s 25th anniversary. The European Central Bank President Christine Lagarde is slated to speak later on Wednesday. Bank of England Governors Andrew Bailey will also be speaking.
Janet Yellen, the United States Treasury Secretary, has issued a warning that it is now “highly likely” that the United States governments will run out of money as soon as June 1. With little over a week left before a potential first-ever U.S. government default, Yellen’s warning is timely.
Oil prices increased on Wednesday as a result of industry data showing a steep decline in US stocks. Which suggests tighter supply as the US driving season approaches.
The week ending May 19 saw a roughly 6.8 million barrel decline in crude stocks and a 6.4 million barrel drop in petrol inventories. According to statistics from the American Petroleum Institute.
Petrol stocks would have fallen for the third week in a row, to their lowest points prior to Memorial Day since 2014. If official data released later in the day was accurate.
The price of gold futures increased 0.47% to $ 1,984.00 /oz, and the EUR/USD rate increased slightly to 1.0772.