FTSE 100 today: Stocks edge up ahead of U.S. CPI; BoE’s Pill doubts hikes

The FTSE 100 experienced a modest increase of 0.06% on Wednesday as investors awaited U.S. inflation data and reviewed the Bank of England's indications regarding potential rate hikes. Germany's DAX rose 0.26% and France's CAC 40 gained 0.45%, while the British pound strengthened by 0.10% to $1.3263. BoE Chief Economist Huw Pill expressed skepticism about the need for four consecutive quarter-point hikes priced by markets, stating that improving data would ultimately determine the outcome.

He noted that underlying inflation may not have reached the 2% target before the energy shock caused by Iran's actions. Jefferies suggested a 20% probability of a Federal Reserve rate increase this month and a full pricing for a December hike, with markets expecting a significant upward surprise for October to shift its expectations.

U.S. inflation is expected to be between 3.6% and 3.7%, with core inflation increasing from 2.5%. Bank of England Governor Andrew Bailey mentioned that the pass-through effect from the energy shock in Britain has been less pronounced so far, but the situation becomes increasingly challenging as time passes. Diplomatic progress towards a resolution in the region seems to be dwindling, with rumors suggesting that a deal may become increasingly unlikely before the midterm elections.

Additionally, Iran's defense officials met to discuss maintaining weapons production under wartime circumstances, with Revolutionary Guards Commander Major-General Ahmad Vahidi referring to the defense industry as a critical component of the armed forces. Iraq's crude exports reached approximately 2.7 million barrels per day, despite disruptions in the Strait of Hormuz, marking a significant increase from roughly 200,000 barrels per day in May.