ANOTHER set of disturbing economic statistics brought further pressure to bear on stocks yesterday. But the market managed to weather most of a flurry of selling that followed worse than expected inflation figures for October thanks to a good rally in gilts.
These fell around 8 to 10 ticks immediately following the inflation data, but picked up strongly as sterling made renewed progress.
The feeling in the market was that interest rates may rise by 25 basis points and possibly 50 basis points as early as next month, after the December 11th meeting between Mr Kenneth Clarke, Chancellor of the Exchequer, and Mr Eddie George, governor of the Bank of England.
Wall Street played a big part in London's reluctance to fall below the psychologically important 3,900 level, with the Dow Jones. Industrial Average looking like extending its run of consecutive gains to a seventh session.
Yesterday brought important US economic news with inflation figures, retail sales and earnings details for October as well as jobless claims for last week. The data was seen as broadly in line with forecasts and caused little damage to the bond market.
Big "bed and breakfast" or tax related trades in British Gas, Handson, Cookson and Lonrho and others, contributed to the much higher than usual turnover during the opening half hour.
But the best individual Footsie performance came from Great Universal Stores after the mail cider and department store group merged its credit information business with US group Experian in a £1 billion plus deal.
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