The US inflation number that everyone has been trying to anticipate for the past week came out yesterday afternoon and sent the UK market motoring. Footsie may have risen less than one per cent, but after days of stagnation and wait-and-see, the effect was electric.
However, the index did nothing but hang fire until after lunch when the US consumer price index came out. The headline number was unchanged after April's 0.7 per cent rise and the core number, which excludes food and energy prices, rose 0.1 per cent. The consensus forecast had been for a gain of 0.2 per cent on both counts.
The US bond market rebounded with the benchmark long bond regaining almost a full point. And the Dow Jones Industrial Average was up almost 150 points within the first half hour of trading. Footsie closed 53.7 higher at 6,504.9. The second-line indices were also roaring. The FTSE 250 gained 43.7 to 5,871.7 and the SmallCap 10.7 to 2,622.9.
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