1630: Close It was another positive finish for London's blue chips on Tuesday, which saw a jump at the opening bell and relatively steady trading throughout the session. The driving force continued to be the easing of political tensions, although there were reports that the ceasefire between Israel and Hamas has been broken after the launch of three rockets from the Gaza Strip. Ultimately, the FTSE 100 closed 38.06 points higher at 6,779.31.
1434: Despite today's slight miss on core US consumer prices Capital Economics still sees the Fed raising rates in March. Commenting on the numbers senior US economist Paul Dales told clients that: "We believe that a further decline in the amount of spare capacity will push core CPI inflation (and more importantly the PCE measure) above 2.0% early next year. This will play a role in prompting the Fed to raise interest rates in March".
1355: The ceasefire between Israel and Hamas has been broken after several rockets were fired from the Gaza Strip, reports are claiming. The Israeli Military has apparently said that three rockets hit an area near the city of Beersheba.
1336: Consumer price rises in the States eased to a year-on-year rate of 2% in July, down from 2.1% in June, as expected. Over the month, prices were up 0.1%, down from 0.2% previously, in line with estimates. However, data from the housing market smashed forecasts: building permits surged 8.1% in July after a revised 3.2% in June, while housing starts jumped 15.7% after a revised 4% fall previously.
1119: The pound has tumbled in the aftermath of the inflation report and is now at a four-month low against the dollar
(cable fell to a low of 1.6634, the lowest since 8 April). According to Tony Wilson from FEXCO, the larger-than-expected drop in the CPI "offered more concrete insight into the likely course of the Bank of England's monetary policy". He said that with CPI now comfortably below the BoE's 2% target, policymakers have no need to use interest rates to tame price rises. "The runes of tomorrow's MPC minutes will add more detail, but for now the markets' assumption that rate rises are once again in the long grass has sent Sterling down across the board."
0945: UK housebuilders have extended gains in London after the inflation data sparked hopes that the BoE may not be in a rush to hike rates. Barratt Developments leads the risers in the sector, up 2.9%, following closely behind by Bovis Homes, Redrow, Bellway, Taylor Wimpey and Berkeley Group. Persimmon, meanwhile, is up 0.7% after a strong set of interim results.
0930: The consumer price index fell back to a reading of 1.6% year-on-year in July from 1.9% in the month before, according to the Office for National Statistics (ONS). The consensus estimate had been for an advance of 1.8%.
0853: UK stocks have begun the session with slight gains, led higher by shares
of homebuilder Persimmon. The firm reported a 58% increase in profit before tax to £213m, while sales were in line with guidance. BHP Billiton is weighing the most on the downside despite having reported a 23% increase in full-year net profits. The mining giant failed to announce a share buyback program, as many analysts had been expecting. Consumer price data are due out later in the session in both the UK and Stateside. The latest figures on UK housing starts are also set for release this afternoon. FTSE 100 up22 to 6,763.11.