Fintel News

UK inflation steady in May as producer price pressures mount

2026-06-17T06:18:35Z

UK consumer price inflation held steady in May despite rising transport costs, while producer input inflation accelerated to its highest level in more than three years, data showed on Wednesday, amid continued pressure from energy prices linked to the Middle East conflict.

According to the Office for National Statistics, the consumer prices index rose 2.8% in the 12 months to May, unchanged from April.

The consumer prices index including owner occupiers' housing costs, the ONS's preferred measure of inflation, also remained unchanged at 3.0%.

On a monthly basis, both CPI and CPIH increased 0.2%, matching the pace recorded in May 2025. The reading came below the FXStreet-cited consensus of a 0.4% rise.

The ONS said transport made the largest upward contribution to the monthly change in annual inflation rates, while food and non-alcoholic beverages provided the largest offsetting downward contribution.

Core CPI, which excludes energy, food, alcohol and tobacco, accelerated to 2.6% in May from 2.5% in April. However, the reading was below the 2.7% increase expected by analysts cited by FXStreet.

Services inflation rose to 3.7% from 3.2%, while goods inflation slowed to 2.0% from 2.4%.

At the factory gate, inflationary pressures remained elevated.

Producer input prices rose 8.7% annually in May, accelerating from a revised 7.9% increase in April and marking the strongest annual rise since February 2023. The reading was slightly below the 8.8% increase expected by analysts cited by FXStreet.

On a monthly basis, input prices increased 0.2%.

The ONS said crude oil provided the largest upward contribution to annual input price inflation.

Factory gate output prices rose 4.0% in the year to May, easing slightly from a revised 4.1% increase in April. Output prices increased 0.5% on the month.

Import price inflation also strengthened, with the import price index rising 10.1% annually in May, up from 8.8% in April.

By Eva Castanedo, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

LONDON MARKET EARLY CALL: FTSE 100 seen lower ahead of UK inflation

2026-06-17T05:57:13Z

Stocks in London are set to open slightly lower on Wednesday, ahead of UK inflation data and a US Federal Reserve interest rate decision later in the day.

IG says futures indicate the FTSE 100 to open 14.6 points lower, 0.1%, at 10,479.61 on Wednesday. The index of London large-caps closed up 0.6% at 10,494.21 on Tuesday.

Sterling was quoted at USD1.3427 early Wednesday, higher than USD1.3422 at the London equities close on Tuesday. Against the euro, sterling fell to EUR1.1560 from EUR1.1567 a day prior.

The euro traded at USD1.1611 early Wednesday, higher than USD1.1603 late Tuesday. Against the yen, the dollar was quoted at JPY160.42, lower versus JPY160.46.

Attention early Wednesday will turn to a raft of UK inflation figures due at 0700 BST.

Consumer price inflation is expected to have risen 0.4% on-month in May, slowing from 0.7% in April.

Input producer price inflation is forecast to increase 0.5% on-month, after a 2.4% rise in April, while the retail price index is expected, after it rose 0.7% on-month and 3.0% on-year in April.

Meanwhile, UK Prime Minister Keir Starmer said French and Indian companies will invest GBP1.3 billion in clean energy and artificial intelligence projects across the UK, creating more than 1,400 jobs in Manchester, Leeds and Birmingham.

On the geopolitical front, the US and Iran are set to launch talks on a final settlement to their conflict on Friday in Switzerland, officials said.

Negotiations on a permanent agreement are due to begin immediately after a signing ceremony and continue through a 60-day window, covering the future of Iran's nuclear programme and the lifting of international sanctions.

However, hopes that the Middle East conflict may be nearing an end were dented by fresh Israeli strikes in southern Lebanon. Iran's central military command warned Israel to "await a harsh response", while Lebanon's state news agency reported strikes on vehicles near Nabatieh that killed four people. The Israeli military said it targeted a suspicious vehicle near its forces and later intercepted rockets before conducting an air strike on a launcher.

Oil prices nevertheless remained below the USD80 mark breached on Tuesday. Brent oil was quoted at USD79.39 a barrel early Wednesday, lower than USD79.95 late Tuesday.

Iranian oil tankers have exited the Gulf zone blockaded by the US Navy, TankerTrackers said, describing the shipments as the country's "first crude oil exports in two months".

In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.6%, the S&P 500 down 0.6% and the Nasdaq Composite down 1.2%.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 0.7%, after data showed Japan's trade deficit narrowed in May as export growth outpaced imports.

According to provisional Ministry of Finance figures, Japan recorded a trade deficit of JPY378.67 billion, about USD2.36 billion, compared with a JPY662.47 billion deficit a year earlier. Exports rose 17.0% year-on-year, beating forecasts, while imports increased 12.5%.

In China, the Shanghai Composite was marginally higher, while the Hang Seng index in Hong Kong was down 0.7%.

The S&P/ASX 200 in Sydney was up 0.6%, supported by data showing Australian household spending returned to growth in May.

The Commonwealth Bank household spending insights index rose 0.2% on a seasonally adjusted basis, reversing a 1.2% decline in April, helped by spending on travel and events.

Gold was quoted at USD4,332.10 an ounce early Wednesday, higher than USD4,323.46 on Tuesday.

In Wednesday's corporate calendar, AO World, Castings, CML Microsystems and Speedy Hire report full-year results, while Oxford Metrics publishes half-year results and PZ Cussons, known for the Carex hand wash, issues a trading statement.

In the economic calendar on Wednesday, UK CPI and PPI data are due, alongside eurozone CPI, Ireland's trade balance and Switzerland's SECO economic forecasts.

Later in the day, attention turns to the US, where retail sales figures, EIA crude oil stocks data and the Federal Reserve's interest rate decision are scheduled.

By Eva Castanedo, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

UPDATE: Iranian tankers exit US blockade zone ahead of peace talks

2026-06-17T05:44:57Z

The first tankers carrying Iranian oil exited a US blockade in the Strait of Hormuz, a tracking website said on Wednesday, two days before Washington and Tehran launch talks on an agreed peace deal still scant on details – including Iran's nuclear programme and the lifting of sanctions.

The talks on a final settlement are set to begin Friday at Switzerland's Burgenstock mountain resort, as news that the Hormuz Strait will reopen sent world oil prices tumbling.

Optimism that the war triggered by the February 28 US-Israeli strikes on Tehran might be coming to an end was dented, however, by fresh Israeli strikes on south Lebanon.

The TankerTrackers website, which monitors oil shipments and storage, marked Iran's "first crude oil exports in two months", citing digital tracking data corroborated by satellite imagery.

"At least two National Iranian Tanker Company (NITC) VLCC supertankers named DIONA (9569695) and HERO2 (9362073) have exited the US Navy blockade perimeter carrying a combined total of 3.8 million barrels of Iranian crude oil between them," TankerTrackers said on X, later adding that a third tanker had exited.

Negotiations over a final deal are to start immediately after the Swiss signing ceremony and continue during a 60-day window, leading to decisions on the fate of Iran's nuclear programme and a plan for the lifting of international economic sanctions, officials said.

The US will allow Iran to immediately begin selling oil and fuel under the deal to end the war, the Wall Street Journal reported on Tuesday, citing unnamed people familiar with the agreement.

A waiver of sanctions on oil sales will take effect immediately after the signing, the Journal added, also covering services such as banking, transportation and insurance.

Some conservatives have expressed concern over the peace deal, with Senate Republicans reportedly requesting the text of the agreement and briefings from the Trump administration.

"Let's look at it and see what it actually is," Senate Majority Leader John Thune was quoted as saying in the Journal.

Despite the deal announcement, the Israeli military said it conducted a strike in south Lebanon after it "identified a suspicious vehicle" near where its soldiers were operating, and its forces intercepted rockets and carried out an air strike against a launcher.

Iran's central military command warned Israel should "await a harsh response" to the strikes, which Lebanon's state news agency said targeted two vehicles in the town of Mayfadoun and another in nearby Shukeen, killing four.

According to a senior US official, speaking on condition of anonymity, the framework agreement has already been signed electronically by President Donald Trump, Vice President JD Vance, Iran's deputy foreign minister Majid Takht-Ravanchi and top negotiator Mohammad Bagher Ghalibaf.

"Likely on Friday... a new round of negotiations between Iran and the US to reach a final agreement will begin," Iranian Foreign Minister Abbas Araghchi said.

"In the final agreement, decisions will be made on the nuclear issues and the lifting of sanctions."

Optimism over the reopening of Hormuz has sent the price of the international benchmark Brent North Sea crude down to USD78.74 a barrel in Wednesday trading. The main US oil contract, West Texas Intermediate, was USD75.85 a barrel.

Weeks of indirect negotiations mediated by Pakistan and Qatar have built momentum for an interim deal, but a comprehensive agreement on Iran's nuclear ambitions and Western sanctions remains elusive.

The US and Israel are pressing to strip Iran of its stockpile of highly enriched uranium, said to have been buried by US strikes last year, while Iran has insisted on its right to enrichment.

The agreed framework has, however, paved the way for talks on those key disputes.

Asked at the G7 in France when the text would be released, Trump said: "It's a very powerful document, and I want it to be released. So probably pretty soon."

Iran's ultraconservative newspaper Vatan-e Emrooz praised the agreement as a "Trump surrender document".

But Araghchi struck a more cautious note.

"We have a history of broken commitments... we have a history of agreements being torn up. All of this is present in our minds," he said.

In a flurry of interviews to talk up the deal, Vance said no US taxpayer money would go to Iran under the deal, as Iranian media reported USD12 billion of frozen assets would be released.

Vance told NBC that nuclear inspectors would also be allowed to enter Iran.

Analysts have warned that the parallel conflict in Lebanon between Israel and Iran-backed Hezbollah presents the biggest threat to the diplomatic thaw.

Lebanon was pulled into the war in March when Hezbollah launched rockets at Israel after the killing of Iran's supreme leader, prompting Israeli strikes and a ground invasion.

That theatre of the conflict could be "the biggest ultimate spoiler" of the coming negotiations, said Ross Harrison, a senior fellow at the Middle East Institute.

By AFP teams in Tehran, Washington, Dubai, Beirut and Jerusalem

source: AFP

UK PM Starmer unveils GBP1 billion French and Indian investments at G7

2026-06-17T05:39:27Z

French and Indian companies will pour GBP1.3 billion into clean energy and artificial intelligence projects in the UK, Prime Minister Keir Starmer has said at the G7 summit.

The investment will bring more than 1,400 jobs to Manchester, Leeds and Birmingham.

It includes GBP1 billion from Paris-based private equity firm InfraVia for battery storage and a flexible energy platform that can be switched on to boost supply when renewable energy is low.

Another GBP25 million will come from Navi Mumbai, India-based Hexaware Technologies and GBP300 million from Hyderabad, India-based Atri Energy Transition to develop large-scale battery storage.

Starmer said: "The world is more dangerous than it has been for a generation, with conflict abroad washing up on our shores.

"That's why I'm focused on making the UK the best place to do business by offering global investors the stability and competitive environment they need to grow, even in the face of global uncertainty.

"These investments will create thousands of high-skilled jobs, back British innovation and strengthen our energy system so families are better protected from global shocks."

The prime minister is working with G7 partners to ease pressures on global energy markets, including efforts to stabilise key shipping routes and de-escalate tensions in the Middle East to help bring down costs for households.

By Helen Corbett, Press Association Political Correspondent in Evian-les-Bains

Press Association: Finance

source: PA

UPDATE: Japan's trade deficit narrows in May, machinery orders grow

2026-06-17T03:33:24Z

Japan posted small trade deficit in May as export growth outpaced imports, provisional Ministry of Finance figures showed.

Japan posted a trade balance deficit of JPY378.67 billion in May, approximately USD2.36 billion, narrowing from a JPY662.47 billion deficit in the same month a year earlier.

Exports jumped 17.0% to JPY9.512 trillion from JPY8.130 trillion, surpassing the FXStreet-cited consensus forecast of 16.2% growth.

Imports grew 12.5% to JPY9.890 trillion from JPY8.792 trillion, missing the forecast of 12.8%.

The quantity of petroleum imports fell 57% in May, while the value of such imports declined 29%.

The Ministry of Finance data also showed the value of exports to China increased 18% as imports rose 14%, while exports to the US grew 13% as imports jumped 26%.

"We expect gains in nominal exports to ease gradually. While robust tech-related demand amid the [artificial intelligence] boom will be supportive in the near term, sluggish global growth overall will limit broader demand for Japanese goods, particularly non-AI capital goods, given the likely softness in global investment," commented Norihiro Yamaguchi, lead economist, Oxford Economics.

Separately, Cabinet Office data revealed that the total value of seasonally adjusted machinery orders received by manufacturers in Japan grew 3.4% in April from the previous month on a seasonally adjusted basis, slowing from 4.3% in March.

Private sector machinery orders rose 5.8%, reversing the 5.3% decline recorded in March.

Excluding volatile orders for ships and from electric power companies, private sector machinery orders jumped 8.7%, following a 9.4% drop in the previous month, beating the 0.9% increase that was forecast.

The machinery order figures are compiled using responses to a survey of 280 Japanese manufacturers carried out each month by the Cabinet Office via post and online.

By Elijah Dale, Alliance News senior reporter Asia-Pacific

Comments and questions to newsroom@alliancenews.com

Japan's trade deficit narrows in May, machinery orders grow

2026-06-17T02:11:34Z