FTSE 100 Rises Amid Inflation and Middle East Tensions
The FTSE 100 rose as investors reacted to slower UK inflation and tensions in the Middle East. The Bank of England is expected to hold interest rates, while the conflict between Iran and Israel raises concerns. Pharmaceuticals fell on tariff news, and AO World's record profits failed to boost its shares.
The FTSE 100 index climbed modestly, closing 0.1% higher, as investors digested the latest UK inflation data ahead of significant central bank meetings in both the U.S. and UK. Despite this positive movement, escalating tensions in the Middle East affected market sentiment.
Inflation in Britain showed signs of slowing in May, aligning with the Bank of England's forecasts. This positions the Bank to likely maintain current interest rates at their upcoming Thursday meeting. Amid the geopolitical unrest, particularly between Iran and Israel, there's added pressure on oil prices, complicating the central bank's interest rate strategy, according to Zara Nokes from J.P. Morgan Asset Management.
Pharmaceutical giants GSK and AstraZeneca saw stock declines following President Trump's announcement of impending pharma tariffs. Meanwhile, ME Group shares surged after contemplating strategic operations, and electronics retailer AO World reported record profits, yet concluded the day with a decline in stock value.
(With inputs from agencies.)
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