UK Inflation Drops to 2.8% Raising Chances of Further QE
LONDON, June 20, 2012 /PRNewswire/ –
UK markets received an unexpected boost on Tuesday, with the FTSE 100 closing the day
at a one-month high of 5589.16 after government data revealed that UK inflation dropped
unexpectedly to 2.8% in May, inching closer towards the government’s 2% target and
fuelling speculation of another QE announcement by the Bank of England as early as next
The fall in inflation goes some way towards easing the pressure off the Bank of
England and throws open the door for the Bank to inject another round of QE to jumpstart
the stalled UK economy.
Impact of falling inflation on the markets
Tuesday’s CPI figure of 2.8% comes on the back of a fall to 3% in April and has been
fuelled, in part, by falling fuel, energy and food prices and the diminishing impact of
the VAT rise last year.
The FTSE 100 has taken heart from this positive number, momentarily forgetting the
woes of the larger eurozone crisis and charging higher to close up 1.7% on the day.
Take a position with Finspreads
Tuesday’s inflation data offers spread betting investors [http://www.finspreads.com ]
a chance to profit from this sudden jump on the FTSE 100, enabling you to profit
irrespective of whether the index climbs higher, or falls lower in the coming days.
With spread betting [http://www.finspreads.com/Why_Finspreads.aspx ], you can profit
not just when markets are rising, but when prices are on the decline as well. This means
that as an investor, if you believe that the current upswing in the FTSE 100 is
short-lived and that the markets will tumble lower in the days to come on account of the
eurozone crisis, you can take a short position on the FTSE 100. If you were right and the
FTSE moves in the direction you had expected, you stand to make a profit; else you make a
Similarly, if you expect that the stimulus package will have the desired impact on the
UK economy, jolting it out of the recession, you could go long (or buy) the FTSE 100
index. You would then make a profit for every point that the index moves in the direction
you had indicated. Else you would make a loss.
Spread betting is a tax-free* alternative to conventional trading and presents an
excellent way of taking a position during volatile markets conditions, such as the
present. Find out more about how you can take a spread betting position
[http://www.finspreads.com/About_spread_betting.aspx ] on over 12,000 individual markets
Spread betting is a leveraged product which can result in losses greater than your
initial deposit. Ensure you fully understand the risks.
*Spread betting is exempt from UK stamp duty and Capital Gains Tax (CGT). However, tax
laws are subject to change and depend on individual circumstances. Please seek independent
advice if necessary.
Finspreads is a leading online financial spread betting [http://www.finspreads.com ]
firm, offering access to thousands of instruments on the world’s financial markets.
The company pioneered fully interactive online spread betting in 1999 and continues to
invest in technology to ensure that its service remains amongst the market leaders.