Markets go into reverse as US inflation unexpectedly spikes higher – business live

Busy day for economic news sees key US inflation figures, IMF on the UK and eurozone growth dataBusiness Today: sign up for a morning shot of financial news 1.59pm GMT US economist Jay Shambaugh on the inflation figures:About that inflation freakout:headline and core cpi inflation jumped on the month, but y/y changes (2.1% headline, 1.8% core) same as last month and down from a year ago.PCE (Fed target) price growth has been tracking lower>>>> Inflation still tracking below Fed’s target pic.twitter.com/T2nmI0wsAQ 1.56pm GMT Soft retail sales could be a temporary phenomenon but higher inflation is not, says economist James Knightley at ING Bank:The US data has provided quite a few surprises. Inflation rates have held steady at 2.1% for annual headline consumer price inflation and 1.8% for ex food & energy, rather than fall to 1.9% and 1.7% respectively as the consensus had predicted. Meanwhile retail sales were far softer than expected, falling 0.3%MoM versus forecasts of a 0.2% rise.Starting with inflation, the main surprise came in apparel, which rose 1.7%MoM. We had suspected it would rebound at some point given its very soft run, but not quite as quickly (it is the biggest increase in more than 10 years). Energy also rose sharply – up 3%MoM, while medical care rose 0.4% (fastest growth for 6M). Continue reading…
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