Inflation terribly outstrips expectations

News of the day, Wednesday, April 13

Inflation in the U.K. edged to an annual rate of 7% in March. Consumer prices increased by 1.1% month-on-month, exceeding the expected rate by 0.7%. The 7% annual rise is the biggest increase in the consumer price index since March 1992. The U.K. energy regulator increased the household energy price cap by 54% from April 1, reacting to a dramatic increase in energy prices, such as a record hike in gas prices. The Bank of England has already increased interest rates from a historic low of 0.1% to 0.75%.

The broad market index closed moderately negative; the previous day's US consumer inflation data (8.5% YoY) may contribute to the Fed's tightening rhetoric. Shares of the oil sector, as well as protective sectors, closed better than the market. At the same time, the monthly OPEC report slightly downgraded the forecasts of crude production in Russia, and as a result, oil prices exceeded $100 per barrel again.

The price of Brent crude is $104.60, WTI — $100.50, GBP/USD — 1.3000, EUR/USD — 1.0829, and gold costs $1975.40 per ounce.