London stocks were steady in early trade on Wednesday, as data showed that UK inflation hit double digits again in September.
At 0830 BST, the FTSE 100 was flat at 6,938.12, while the pound was 0.5% lower versus the dollar at 1.1268 after figures from the Office for National Statistics showed that higher food prices helped push up inflation to a record 10.1% last month.
The consumer price index rose by 10.1% in the 12 months to September, a 40 year high, compared to August’s rate of 9.9%. The figure was largely in line with expectations. On a monthly basis, CPI rose by 0.5% in September, compared to 0.3% in September 2021.
The ONS said that rising food prices made the largest upward contribution to the change in both CPIH and CPI. The largest downward pressure was transport, as the price of motor fuels and second-hand cars continued to fall.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Despite attempts to turn down the heat, the cauldron of hot prices continues to bubble, spitting out yet more problems the UK government has to grapple with amid the ongoing political turmoil.
“Scorching grocery prices are the big driver of the UK’s headline rate of inflation, which has jumped back into double digits, returning to July’s high. But with many consumers, households and businesses already feeling the burn of higher borrowing costs, a cold shock is set to be incoming. As they ramp down non-essential spending it is set to freeze off growth in the economy which should help bring down inflation as demand for goods and services lowers.
