London’s FTSE 100 shot up this morning after data showed inflation jumped past the Bank of England’s target in May.

The blue-chip index rose 0.2 per cent at the open to its highest since February 2020, lifted by gains in heavyweight financials and energy stocks.

Life insurers and banks provided the biggest boosts, while oil majors BP and Royal Dutch Shell advanced.

Meanwhile, the domestically focused mid-cap FTSE 250 was down by 0.3 per cent during morning trading.

British inflation unexpectedly jumped above the BoE’s two per cent target in May when it hit 2.1 per cent. The rise was driven by a surge in clothing, fuel, games, and takeaway food prices.

“Today’s inflation print confirms that as the UK economy proceeds in its reopening, inflationary pressures continue to build,” said Ambrose Crofton, global market strategist at JP Morgan Asset Management.

“With UK consumers cooped up over a miserable winter, many are now keen to enjoy themselves and spend on the things they’ve missed out on.”

Market movers

The morning’s biggest winner was Royal Dutch Shell, who rose two per cent, followed by outsourcer Bunzl, up by 1.9 per cent.

Betting firm Flutter Entertainment and Rentokil also rose 1.4 per cent and 1.3 per cent respectively.

Miner Antofagasta was the morning’s biggest faller, dropping by 3.4 per cent, followed by Glencore’s 2.4 per cent hit.

Meanwhile, Anglo American and Fresnillo both dipped by 2.3 per cent and two per cent respectively.

Around the world

Asian shares retreated slightly today after modest Chinese retail sales data and industrial production offered reason for caution.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, while Chinese blue chips dipped 1.1 per cent.

Japan’s Nikkei also eased 0.5 per cent, but South Korean stocks surged 0.6 per cent to a record high.

Trading could be choppy around the conclusion of the Federal Reserve’s two-day meeting later in the session.

“We think Chair Powell will indicate officials discussed talking about tapering, but tapering itself is still someway off given the Fed remains well short on making substantial progress on employment with payrolls still 7.3m below pre-pandemic levels,” said NAB economics director Tapas Strickland.