Inflation falls unexpectedly in February – live updates

An empty high street

An empty high street

07:17 AM

Inflation slips

Good morning. The rate of Consumer Price Index inflation fell to 0.4pc in February from 0.7pc in January, the Office for National Statistics said this morning, defying expectations of a rise.

Elsewhere the FTSE is tipped to open 0.65pc lower following falls on Wall Street and Asian markets overnight.

Asian shares skidded to a two-week trough on Wednesday and the dollar neared four-month highs as coronavirus lockdowns in Europe and potential US tax hikes hit investor sentiment, leading to a flight to safety.

5 things to start your day

1) North Sea on borrowed time as green targets block exploration: Licences to drill will no longer be granted if oil companies threaten the Government’s commitment to a net zero carbon economy.

2) Bentley buyers splash on new £200k Continental GT Speed: Bentley is enjoying a surge in orders as rich motorists splash out on its luxury cars including the new £200,000 Continental GT Speed.

3) Warship U-turn set to boost British shipbuilding: Government reverses course on new supply ships for Navy but fears persist that the work will still go abroad.

4) British Airways owner in Heathrow and Gatwick slots deal: IAG pledged slots at Heathrow and Gatwick airports or aircraft to lenders to renew its corporate overdraft for up to five years.

5) Retail chiefs blast business rates ‘inaction’: Retail bosses have lashed out at Treasury “inaction” on business rates, branding its long-awaited report “a huge disappointment”.

What happened overnight

Asian shares hit a two-week low on Wednesday, oil weakened further and the dollar neared four-month highs as coronavirus lockdowns in Europe and potential US tax hikes hit risk appetite, leading to a flight to safety.

MSCI’s broadest index of Asia-Pacific shares outside of Japan was off 1pc after falling 0.9pc on Tuesday. It went as low as 676.46 points, a level last seen on March 9.

The index has had a disappointing run in March after five straight months of gains, as risk assets were earlier spooked by fears inflation will pick up at a faster-than-expected pace led by successful coronavirus vaccine rollouts and massive U.S. fiscal stimulus.

Japan’s Nikkei stumbled 1.8pc while South Korea’s KOSPI slipped 0.5pc. Chinese shares were in the red for a second day with the blue-chip CSI300 index down 1.2pc. Hong Kong’s Hang Seng skidded 1.7pc.

On Wall Street overnight, the Dow Jones Industrial Average fell 0.94pc, the S&P 500 lost 0.76pc and the Nasdaq Composite dropped 1.12pc.

Coming up today

Corporate: Bellway, Softcat (Interim results); Burford Capital, Pendragon, (Full year); Diploma, Halma (Trading statement)

Economics: Inflation (UK), flash PMIs (UK, Japan, eurozone, Germany, France, US); durable goods orders (US)