2025-09-17 11:09
UK inflation remains at 3.8%, highest among major economies Food prices jump, driving public inflation expectations BoE likely to maintain rates due to high inflation risks LONDON, Sept 17 (Reuters) - British inflation in August held at 3.8%, official data showed on Wednesday, the highest among major advanced economies and reinforcing expectations that the Bank of England will not cut interest rates until next year. The rise in food prices - which the BoE sees as key for shaping public inflation expectations - was the sharpest since January last year and offset a drop in airline fares, the Office for National Statistics said. Sign up here. James Smith, research director at the Resolution Foundation think tank, said headline inflation remained uncomfortably high and households would feel the impact of higher food prices. "The chancellor should look to ease the cost of living pressures on struggling families at the budget in November," Smith said. Food and non-alcoholic drinks prices were 5.1% higher in August than a year earlier, after a 4.9% rise in July. Last month, longer-term inflation expectations among the public rose to the highest since 2019. 'HIGHER BILLS' Finance minister Rachel Reeves said she was determined to "bring costs down and support people who are facing higher bills." Inflation for services - closely watched by the BoE - slowed to 4.7% from 5.0% in July. Many firms have said they would raise prices after an increase in their social security contributions in Reeves' first budget last October. She is expected to raise taxes again when she delivers her next budget on November 26. Core inflation, which excludes energy, food and tobacco prices, fell to 3.6% from 3.8%. Most economists polled by Reuters and the BoE had forecast that the headline measure of inflation would hold at 3.8%. British inflation is higher than in the United States, where it increased to 2.9% in August and in the euro zone, where it rose to 2.1%, just above the European Central Bank's 2% target. The BoE has forecast that British inflation will reach 4% in September and stay above its 2% target until the spring of 2027. The central bank is expected to hold its benchmark interest rate steady at 4% on Thursday. The Monetary Policy Committee's 5-4 split vote for a quarter-point cut last month suggested it might slow an already gradual pace of rate cuts. While Britain's labour market has loosened, basic wage growth of 4.8% remains too high for the BoE. However, official data last week showed Britain's economy grew just 0.2% in the three months to July. "We still expect the looser labour market to weaken wage growth and eventually bring down UK inflation to similar rates as in the U.S. and the euro zone," Paul Dales, chief UK economist at Capital Economics, said. That would allow the BoE to cut rates from 4.0% now to 3.0% by the end of next year, Dales said. "But we think the upside inflation risks are just too high for the Bank of England to cut interest rates tomorrow or, more significantly, at the following meeting in November," he added. https://www.reuters.com/sustainability/sustainable-finance-reporting/food-prices-drive-british-inflation-38-august-above-us-euro-zone-2025-09-17/
2025-09-17 10:58
Gold hit all-time high of $3,702.95/oz on Tuesday US Federal Reserve statement due at 1400 GMT today Record gold prices in India fail to unlock scrap supply Sept 17 (Reuters) - Gold prices retreated on Wednesday from a record-high level touched in the previous session, as investors locked in profits and a firmer dollar weighed on prices ahead of the Federal Reserve's policy decision later in the day. Spot gold was down 0.6% at $3,668.04 per ounce, as of 1151 GMT, after hitting a record high of $3,702.95 on Tuesday. Sign up here. U.S. gold futures for December delivery dropped 0.6% to $3,703.50. The dollar (.DXY) , opens new tab edged 0.2% higher after dropping to a more than two-month low on Tuesday. A firmer dollar makes greenback-priced gold more expensive for overseas buyers. "On several occasions when gold approached $3,700 it came off again, which could well suggest option writers defending that level," StoneX analyst Rhona O'Connell said. Gold's relative strength index (RSI) stood at 75, down from a more than 17-month high of 81 on Tuesday, indicating that the metal was overbought. The spotlight is on the U.S. central bank, which is expected to deliver a quarter-percentage-point rate cut later in the day. Remarks from Fed Chair Jerome Powell will also be closely watched for signals on the future path of interest rates. "(We still) expect a 25-point cut but probably with three dissenting voters," O'Connell added. U.S. President Donald Trump has called for Powell to enact a "bigger" rate cut. Lower rates reduce the opportunity cost of holding non-yielding bullion. Deutsche Bank raised its gold price forecast for next year to an average of $4,000 per ounce, up from $3,700 per ounce, citing favorable foreign exchange and rates environments that could drive further gains. Elsewhere, in India supplies of used gold jewellery and coins, typically released when investors book profits, have been scarce with many expecting the bullion prices will continue to climb. Spot silver slipped 2.3% to $41.58 per ounce, platinum was down 2.3% at $1,358.67 and palladium fell 2.3% to $1,149.25. https://www.reuters.com/world/india/gold-prices-retreat-record-high-ahead-fed-rate-verdict-2025-09-17/
2025-09-17 10:55
Concerns over potential Russian supply disruption support prices Markets eye Fed meeting for clues on economy US crude stockpiles fell last week, industry data shows LONDON, Sept 17 (Reuters) - Oil prices eased on Wednesday, after rising more than 1% in the previous session, though ongoing geopolitical jitters provided a floor for the market, with traders eyeing an expected interest rate cut from the U.S. Federal Reserve later in the day. Brent crude futures were down 62 cents, or 0.9%, to $67.85 a barrel at 1042 GMT, while U.S. West Texas Intermediate crude futures were down 63 cents, or around 1%, to $63.89 a barrel. Sign up here. The benchmarks settled more than 1% higher in the last trading session due to concerns that Russian supplies may be disrupted by Ukrainian attacks. Reuters reported on Tuesday that three industry sources said Russia's oil pipeline monopoly Transneft (TRNF_p.MM) , opens new tab had warned producers they might have to cut output following Ukraine's drone attacks on critical export ports and refineries. "If the drone damage (to Russian energy infrastructure) proves to be short-lived, the recent range of say, $5 per barrel, will resume," said PVM Oil Associates analyst John Evans. "Given the impasse in sanctions and the arrival of more OPEC barrels, the only hope for an oil rally has been through the lack of distillate stock as we approach winter." PESKOV SAYS EU PLANS WILL NOT AFFECT RUSSIA Kremlin spokesperson Dmitry Peskov on Wednesday said the European Union's plans to phase out Russian energy and commodities more quickly will not affect Russia. Despite sanctions already in place, the EU still imports billions of euros worth of Russian energy and commodities, ranging from liquefied natural gas to enriched uranium, though its imports of Russian oil and gas have plummeted. Investors are also awaiting the outcome of the Federal Reserve's September 16–17 meeting, with a new governor, Stephen Miran, on leave from the Trump administration, joining the deliberations. While markets have largely priced in a 25 basis-point Fed rate cut, which could ease borrowing costs and boost fuel demand, traders will be watching for remarks from Fed Chair Jerome Powell. Market sources citing American Petroleum Institute figures said that U.S. crude and gasoline stocks fell last week, while distillate stocks rose. The market is also awaiting stockpile data from the U.S. Energy Information Administration - a Reuters poll of nine analysts estimated crude inventories fell while distillate and gasoline stockpiles rose. "It looks like a make or break moment for the latest bounce in oil prices - reports of large funds piling in with bearish bets show that glut fears remain, something that could make gains hard to sustain," said Chris Beauchamp, chief market analyst at IG Group. "While Russia has continued to test NATO's resolve, it seems that tensions will remain contained, providing a further negative impulse and making a test of recent lows more likely." https://www.reuters.com/business/energy/oil-retreats-geopolitical-jitters-limit-declines-2025-09-17/
2025-09-17 10:50
EU to speed up Russia's fossil fuel exit Kremlin: EU phase-out plans won't impact Russia MOSCOW, Sept 17 (Reuters) - The European Union's plans to phase out Russian energy and commodities more quickly will not affect Russia and will not force it to change its position, Kremlin spokesman Dmitry Peskov said on Wednesday. The head of the EU's executive, Ursula von der Leyen, said on Tuesday after a call with U.S. President Donald Trump that the European Commission would propose a faster phase-out of Russian fossil fuel imports. Sign up here. "They (European countries) mistakenly believe that the continuation of the sanctions policy is capable of somehow influencing the position of the Russian Federation," Peskov told a daily conference call with reporters. "Russia, which defends its national interests, is certainly not affected by these sanctions. And the last three years have eloquently demonstrated this," he added. Russia's economy has shown resilience in the face of sanctions imposed by the West over the conflict in Ukraine, though it is also grappling with persistently high inflation and a rising budget deficit partly as a result of sharply increased military spending. Despite the sanctions, the EU still imports billions of euros worth of Russian energy and commodities, ranging from liquefied natural gas to enriched uranium, though its imports of Russian oil and gas have plummeted. https://www.reuters.com/business/energy/kremlin-shrugs-off-eu-plans-speed-up-phase-out-russias-energy-2025-09-17/
2025-09-17 10:43
2026 gold price seen at $4,000/oz on demand, Fed policy Risks include strong equities, seasonal gold weakness Sept 17 (Reuters) - Deutsche Bank (DBKGn.DE) , opens new tab raised its gold price forecast by $300 for next year to an average of $4,000 per ounce on Wednesday, due to strong central bank demand, potential U.S. dollar weakness and a resumed Federal Reserve rate-easing cycle. The bank raised its forecast from a previously expected $3,700/oz in April, citing factors including downside risks to the Federal Reserve's base case of holding rates steady in 2026 following three anticipated rate cuts in 2025. Sign up here. It flagged uncertainty stemming from changes in the Federal Open Market Committee's composition and ongoing challenges to Fed independence as being supportive for gold prices. The Fed is set to announce its policy decision later on Wednesday, amid challenges including a legal dispute over its leadership and U.S. President Donald Trump's efforts to exert greater control over rate policy and the bank’s broader role. Deutsche Bank pointed to official gold demand continuing at twice the pace of the 2011-2021 average, largely driven by China, and noted that recycled gold supply is running 4% below expected levels this year, easing limits on gold’s upside. However, the bank warned of risks, including strong equity market performance, seasonal weakness in gold prices during the fourth quarter based on 10-year and 20-year historical trends, and U.S. economic conditions that may prompt the Fed to hold rates steady in 2026. Deutsche Bank said that while positive developments in U.S. trade negotiations could reduce uncertainty for business investment, gold's sensitivity to such events was limited. Non-yielding bullion, often considered a safe-haven asset during times of uncertainty, tends to perform well in a low-interest-rate environment. It has risen about 40% year-to-date and hit a record high of $3,702.95 on Tuesday. The bank also raised its silver price forecast for 2026 to an average of $45 per ounce, up from $40. https://www.reuters.com/business/finance/deutsche-bank-raises-2026-gold-forecast-4000-bullion-hits-record-highs-2025-09-17/
2025-09-17 10:38
LONDON, Sept 17 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-at-Large, Finance and Markets Sign up here. With a first Federal Reserve , opens new tab interest rate cut of 2025 now considered to be in the bag, world markets are hungry for signals on how much more comes after. This has allowed the dollar to stabilize at four-year lows against the euro ahead of today's decision. U.S. stocks also stalled on Tuesday and futures were flat ahead of today's bell, with Fed rate cut bets now gravitating to exactly 25 basis points after news of roaring 5% annual retail sales growth in August helped put the kibosh on thoughts of a bigger move this week. Gold backed off too. That didn't stop U.S. long bonds rallying , opens new tab further, however. Helped by brisk demand for 20-year debt at Tuesday's auction, the 30-year yield hit a 4-1/2 month low of 4.62% ahead of the Fed announcement. In today's column, I take a look at whether the Fed might soon start stimulating an already healthy economy and explore how challenging it is to determine exactly where "neutral" truly is. Today's Market Minute * President Donald Trump on Tuesday announced an agreement between the U.S. and China to keep TikTok operating in the United States, with three sources familiar with the matter saying the deal was similar to one discussed earlier this year. , opens new tab * Britain and the United States have agreed a technology pact to boost ties in AI, quantum computing and civil nuclear energy. The "Tech Prosperity Deal" is part of U.S. President Donald Trump's second state visit to Britain, which formally begins on Wednesday. * President Donald Trump's renewed push to nix quarterly corporate disclosures, a drive that went nowhere in his first administration, has a better chance this time as the White House takes more control of the Securities and Exchange Commission's agenda. * The Trump administration has made it clear that they think Chair Jay Powell’s team has done a poor job with inflation control. Eurizon SLJ asset management CEO Stephen Jen argues that the president may have a point. * The rush to hedge U.S. equity exposure this year was initially seen as part of a broad 'de-dollarization' process. But, writes ROI markets columnist Jamie McGeever, as the months go by and U.S. stocks roar to fresh tech-fueled highs, this theory seems to be crumbling. Chart of the day There may be many reasons why the Fed decides to resume policy easing with its first interest rate cut of the year on Wednesday - but the current pace of GDP growth, booming retail sales, the loosest financial conditions in more than three years and inflation still far above target are not among them. Today's events to watch * U.S. August housing starts/permits (8:30 AM EDT) * Bank of Canada policy decision (9:45 AM EDT) and press conference (10:30 AM EDT) * U.S. Federal Reserve's policy decision and updated economic and rate projections (2:00 PM EDT), press conference (2:30 PM EDT) * European Central Bank President Christine Lagarde speaks * U.S. President Donald Trump visits Britain * U.S. corporate earnings: General Mills, Progressive Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-09-17/
