FTSE 100 kicks off busy UK data week positively

London’s FTSE 100 bounced higher today to kick off a hefty week of UK economic news.

The capital’s premier index jumped 0.92 per cent to 7,385.17 points, while the domestically-focused mid-cap FTSE 250 index, which is aligned with the health of the UK economy, edged 0.03 per cent higher to 19,622.25 points.

Investors are eyeing several key data releases this week that will yield more clues on how weak the economy currently is.

New jobs figures out tomorrow are likely to show wages failing continuing to lag behind price rises, raising fears a consumer spending slowdown is on the way. 

FTSE 100 edged higher today

Fresh inflation data out on Wednesday is forecast to rise from 10.1 per cent to around 11 per cent.

The new numbers will set the stage for chancellor Jeremy Hunt’s budget on Thursday, in which he is expected to hike taxes and cut spending to meet the government’s financial targets.

There are concerns that a big fiscal tightening, to the tune of around £60bn, will intensify a looming recession.

“With the economy already careering into recessionary territory, this would place further obstacles in the way of escaping stagflation, despite the fact that the Bank of England may have peaked in terms of its aggressive interest rate hiking policy,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.

Last week, global markets rallied after new US inflation figures came in much lower than anticipated, strengthening the likelihood of the Federal Reserve slowing its rate hike cycle.

Some of that positivity extended into the beginning of this week.

Central banks around the world have been hiking interest rates rapidly this year to tame rising prices, heaping pressure on stock markets.

The pound dropped around 0.55 per cent against the US dollar. It gained ground rapidly on the greenback last week, boosted by the prospect of fewer rate rises by the Fed.

UK borrowing costs were broadly flat. 

Oil prices edged lower.