Inflation rises unexpectedly as rationing pushes up food prices

Inflation has risen to 10.4 percent, giving the Bank of England a blow ahead of its decision on the next rate hike tomorrow.

Policymakers have been urged by analysts to slow the pace of rate hikes to ease pressure on the global banking system.

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what happened overnight

Asian equities rallied cautiously on Wednesday on hopes that a global banking crisis would be averted, vying with uncertainty over the US interest rate outlook.

Discomfort left both S&P 500 futures and Nasdaq futures little changed. EUROSTOXX 50 futures were up 0.2 percent, while FTSE futures were up 0.1 percent.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan was up 0.9 percent, while Chinese blue chips were up 0.3 percent. Japan’s Nikkei rallied 1.6 percent, led by a rebound in battered bank stocks.

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Stocks rose in Australia and futures for benchmarks in Japan and Hong Kong rose. Australian and New Zealand government bond yields rose, tracking action in the Treasury market on Tuesday.

US lender stocks rallied as fears of a global banking crisis eased, sending Wall Street’s major stock indices higher ahead of the much-anticipated Federal Reserve interest rate decision.

The Dow Jones Industrial Average rose 316 points, or 0.98 percent, to 32,560.60. The S&P 500 rose 1.3 percent to 4,002.87, while the tech-rich Nasdaq Composite climbed 1.58 percent to 11,860.11.

Extreme volatility in short-dated government bonds dragged on for the nine straight days, with traders betting on another 25 basis point rate hike. The policy-sensitive yield on two-year government bonds rose by up to 21 basis points to 4.18 percent.

Across the Atlantic, the FTSE 100 index closed 1.79 percent higher at 7,536.22, marking its best performance in over four months. The exporter-led index was boosted by a week-long pound, along with a rally in bank stocks, which rose 3.34 percent on the FTSE 350.


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