London indexes muted ahead of week of jolting data

London’s top indexes were muted today as investors eyed a week of flagship economic announcements.

The capital’s premier FTSE 100 index climbed 0.63 per cent higher to 7,464.80 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, inched up 0.01 per cent to 19,924.11 points.

Although markets were tepid to start the week, traders are likely to be jolted into action by fresh jobs markets and inflation figures that are published today and tomorrow respectively.

The cost of living may have reached as high as 9.3 per cent last month, according to investment bank Deutsche Bank. It is already running at a 30-year high of seven per cent.

A firming in wage pressures coupled with eye-wateringly high inflation numbers are likely to strengthen markets’ expectations for more rate hikes from the Bank of England this year.

The central bank has already lifted borrowing costs from a record low 0.1 per cent to a 13-year high of one per cent in just six months.

Higher interest rates tend to weigh on equities by knocking the value of companies’ future cash flow and making fixed income assets more attractive.

Telecoms giant Vodafone was among the best performers on the FTSE 100, closing 1.9 per cent higher after news broke over the weekend that a UAE state-backed firm Emirates Telecommunications Group has purchased a 10 per cent stake in the company for over £3bn.

Aerospace giant Rolls Royce was the worst performer on the index, finishing 3.78 per cent lower.

The pound partially reversed an awful run against the greenback, strengthening 0.11 per cent to buy $1.2276.