The FTSE (^FTSE) gave up its early morning gains to trade just 0.1% higher by the end of the day amid news that the UK is set to see the highest average inflation rate in G7.
London's benchmark index was muted most of Tuesday, despite miners and oil majors gaining ground on the back of rallying crude prices. Meanwhile the CAC (^FCHI) was 0.1% lower in Paris, and the Frankfurt DAX (^GDAXI) was 0.5% on the day.
The Organisation for Economic Co-operation and Development (OECD) predicted UK inflation is set to come in at 7.2% for 2023, increasing its previous forecast of 6.9% from June. This would be the highest rate across the G7 and third highest across the G20.
Britain will also one of the worst performing advanced economies, with growth in 2023 only outpacing Germany and Argentina, while next year only Argentina will be below the UK.
The group downgraded its expectations for UK growth next year by 0.2 percentage points, saying it now expects the economy to expand by just 0.8% in 2024.
Meanwhile across the pond, Wall Street stocks were lower ahead of a interest rate decision from the Federal Reserve on Wednesday evening.
It also came as oil prices hit $95 (£76.73) per barrel, a 10-month high, amid supply concerns.
Brent crude (BZ=F), the international benchmark, pushed to $95.28 per barrel during the morning, reaching its highest level since November 2022.
It is being driven higher by worries of a supply deficit after recent output cuts by Saudi Arabia and Russia, which have been extended until the end of this year.
Despite looking technically overbought, the upside momentum looks strong, with a combination of supply and demand drivers supporting the rally," Kyle Rodda, senior financial market analyst at capital.com, said.
"Of course, the big story here is the expected shortfall in supply flagged by OPEC+ last week. The cartel says it sees a deficit of 3 million barrels per day in the final quarter of this year, which would be the largest since 2007.
"The increase in oil price is fuelling higher yields, especially at the long end, although equity markets have proven surprisingly resilient."
Blog close and recap
Well that's all we have time for today. Thanks for following along and be sure to join us again tomorrow. We'll be here bright and early!
Here's a quick recap of some of today's top headlines...
Oil continues rally to 10 month high
B&Q owner issues profit warning
Eurozone inflation lower than expected in August
OECD ups forecast for global growth
US housing starts fall to lowest since June 2020
Have a good evening!
RAC warns on petrol and diesel prices
The price of diesel is expected to increase from an average of 159p a litre to over 170p if oil hits $100, according the RAC. Meanwhile, petrol could rise from 155.5p to 160p per litre.
Simon Williams, RAC fuel spokesman, said:
“Since the beginning of August petrol has gone up 10p a litre and diesel nearly 13p adding £5.50 to tank for petrol and £7 for diesel.
“With oil now heading towards $100 a barrel, as a result of further production cuts by Saudi Arabia and Russia and rising demand from China, drivers are in for a hard time at the pumps.”
Instacart makes debut on Nasdaq
Following in the footsteps of Arm (ARM) and RayzeBio (RYZB) last week, the trading of Instacart's (CART) stock is set to begin on the Nasdaq (^IXIC) exchange in the US later on Tuesday under the ticker symbol “CART.”
On Monday, the company, which filed for the initial public offering (IPO) as "Maplebear", priced its IPO of stock at $30 a share, raising $660m (£532.7m) for the grocery delivery company.
The price gives Instacart a market value of around $10bn.
Instacart is the market leader among third-party grocery delivery companies, according to market research firm YipitData.
Canada's inflation rate climbs to 4%
Canada’s annual consumer prices index has risen from 3.3% in July to 4% in August, new data has shown.
This was largely the result of a 0.8% increase in gas prices after they fell 12.9% in the year to July.
US housing starts fall to lowest since June 2020
The number of new house-building projects, or ‘housing starts’, dropped by 11.3% in August compared to July, to an annualised rate of 1.283 million homes.
It was the lowest level since June 2020, pointing to a weaker housebuilding market.
However, the number of building permits rose 6.9% during the period, suggesting the housing market is absorbing the impact of higher interest rates.
Twitter to move behind paywall
X, formerly known as Twitter, is looking to charge users a “small monthly payment” in order to tackle bots.
Elon Musk, who took over the social platform, is now “moving to having a small, monthly payment for use of the X system” to combat “vast armies of bots”, he said during a livestreamed conversation with Israeli prime minister Benjamin Netanyahu on Monday.
He did not reveal how much the new plan would cost or what additional features subscribers would get.
Property: What to do if you can’t sell your home
Price reductions are now at 36%, the highest level since January 2011, and many vendors are struggling to sell their homes, even after they’ve already dropped the price, according to Rightmove.
So, what can be done? We spoke to the experts and asked their advice for frustrated sellers wanting to move things along.
This included when to reduce asking prices (and by how much), plus if, and when, you should change agents.
Wall Street set for muted open ahead of Fed decision
We are just over an hour from the opening bell in New York, and here is how things are looking across the pond...
It comes as traders await another interest rates decision from the US Federal Reserve. The central bank has a two-day monetary policy meeting, which will end with the announcement on Wednesday.
It is widely expected the central bank will hold benchmark interest rates.
Ocado boosted by strong sales
Shares in online grocer Ocado (OCDO.L) climbed 2.89% on Tuesday after the company said its revenue rose 7.2% to £569.6m in the 13 weeks to 27 August, accelerating from growth of 5% in the first half.
It said the results of its venture with M&S (MKS.L) reflected a 1.5% rise in active customers to 961,000 at the end of the quarter, with average orders per week up 1.9% year-on-year to 381,000.
Since June, Ocado, like other grocery stores, has reduced the prices of more than 630 of its items to help consumers with high costs.
Ocado also maintained its full-year outlook.
BP appoints first female CFO
BP (BP.L) has appointed Kate Thomson as interim chief financial officer (CFO). She will be stepping into the role after Murray Auchincloss moved to become interim chief executive.
Thomson is set to be the oil giant's first female CFO, a company spokesman confirmed to the Guardian this morning.
Kate’s experience and skills make her ideally suited to take on the role of interim CFO.
She brings deep technical knowledge together with a detailed understanding of BP, and has a first-class track record of leadership across our finance function.
I look forward to working alongside her as we continue to deliver BP’s strategy.