FTSE 100 on Decline, Reacting to News about Inflation in the UK

CPI (Consumer Price Index) was 8.7% in annual terms (8.4% — forecast, 8.7% last month).

Core CPI (excluding prices for food, energy, tobacco and alcohol) rose to 7.1% in annual terms (6.8% — forecast, 6.8% last month). This is the highest core inflation since 1992.

News of persistently high inflation may have an impact on the decision of the Bank of England on the value of the interest rate, it will be known tomorrow at 14:00 GMT+3. Recall that in the fight against inflation over the past 18 months, the Bank of England raised the rate from 0.1% to 4.5%. A further increase in the rate, according to CNBC, is fraught with the development of a mortgage crisis.

The chart of the FTSE 100 stock index shows negative dynamics. Today, the price of the FTSE 100 fell sharply to the psychological level of 7,500. Note that this happened after testing the level of 7,680, which previously served as support, and now resists the growth of the FTSE 100 index. Perhaps, in conditions of increased volatility against the background of tomorrow's meeting of the Bank of England, the bears will take a new attack on the psychological level 7,500. If successful, the price of the FTSE 100 may drop to the lower line of the descending channel (shown in red).