# FTSE 100 hits 3-week high, unfazed by latest inflation surge
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-07-20
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: UK's FTSE 100 at Three-Week High on Oil, Mining
Meta Description: Discover how UK's top share index climbed to a three-week high with a surge in inflation, fuelled by oil and mining stocks. Get the latest market updates
URL: https://financedigest.com/ftse-100-hits-3-week-high-unfazed-by-latest-inflation-surgehtml

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By Sruthi Shankar

(Reuters) -UK’s top share index hit a three-week high on Wednesday, lifted by oil and mining stocks, even as a surge in inflation to fresh 40-year highs cemented bets for a bigger-than-usual rate hike by the Bank of England next month.

The blue-chip FTSE 100 climbed 0.5% to its highest since June 29, with commodity-linked stocks such as Shell, BP, and Rio Tinto providing the biggest boost.

British consumer [prices surged](https://www.financedigest.com/explainer-oil-price-surge-changes-ecb-narrative-only-at-the-margins.html "Explainer-Oil price surge changes ECB narrative only at the margins") in June to hit an annual rate of 9.4%, the [highest](https://www.financedigest.com/euro-zone-investor-morale-hits-two-year-high-in-april.html) since early-1982, according to official figures that bolstered the chances of a rare half percentage-point rate increase in August.

Rising petrol prices took UK [headline inflation](https://www.financedigest.com/boes-mann-falling-headline-inflation-high-core-make-policy-difficult.html "BoE’s Mann: Falling headline inflation, high core, make policy difficult") another leg higher in June and we expect it to peak above 11% in October,” said ING economist James Smith.

But core [inflation may have already peaked](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked"), and that means today’s numbers are unlikely to change too many minds when it comes to August’s Bank of England decision. We still narrowly [expect a 50bp hike](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December") at that meeting.

Globally, [stock markets](https://www.financedigest.com/yes-winning-the-euros-really-can-help-your-stock-market.html "Yes, winning the Euros really can help your stock market") were rebounding as better-than-feared U.S. earnings, a [pause in the dollar’s](https://www.financedigest.com/dollar-pauses-for-breath-as-fed-swings-into-focus.html "Dollar pauses for breath as Fed swings into focus") relentless rally and the expected resumption of Russian gas supply to Europe all aided sentiment. \[MKTS/GLOB\]

[Advertising firm](https://www.financedigest.com/uk-watchdog-warns-crypto-firms-to-prepare-for-advertising-rule-change.html "UK watchdog warns crypto firms to prepare for advertising rule change") WPP gained 2.7% after U.S. rival Omnicom [Group reported](https://www.financedigest.com/uk-report-warns-of-impact-of-islamist-groups-in-prisons.html "UK report warns of impact of Islamist groups in prisons") stronger-than-expected quarterly results.

The domestically focussed midcap index rose 0.4%, also hitting its highest in three weeks.

Royal Mail dipped 5.1% after the post and parcel delivery firm reported a 11.5% drop in its quarterly revenue in its UK arm, hurt by a decline in its letters business and inflation-hit consumers cutting back on [online shopping](https://www.financedigest.com/the-high-street-is-dead-long-live-online-shopping.html "The high street is dead – long live online shopping! ").

Morses Club PLC tumbled 39.7% after the subprime [lender said it was pursuing a potential use of the so-called scheme of arrangement to deal](https://www.financedigest.com/u-s-mid-tier-lenders-shares-rise-in-frankfurt-after-svb-deal.html "U.S. mid-tier lenders shares rise in Frankfurt after SVB deal") with the high levels of redress claims that threaten to jeopardise its future.

(Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V)


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