UK Inflation Ticks Higher, Sterling Edges Up Slightly

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.44% on 20 August 2025.  

Macro Update: UK consumer price inflation saw a mild increase in July, rising to 3.8% from 3.6% in June, slightly exceeding market expectations. The upward move was largely driven by changes in fuel price trends and a rise in services inflation. The services component, which moved from 4.7% to 5.0%, played a notable role in the increase, influenced in part by base effects in sectors such as communications and hospitality. This reading was marginally above the Bank of England’s forecast, prompting some market attention ahead of upcoming economic data. 

Top Market Movers: Among top gainers on FTSE 100 index, ConvaTec Group PLC (LSE: CTEC) witnessed a rise of 5.31% followed by Unilever PLC (LSE: ULVR) which gained around 2.06%. 

Commodity Update: The U.S. dollar strengthened for a third straight session on Wednesday ahead of the Federal Reserve’s Jackson Hole symposium, where traders await policy cues. Gold eased 0.07% to $3,356.10, silver slipped 0.42% to $37.17, while copper inched up 0.02% to $9,699.15. Brent crude rose 0.21% to $65.93 amid resurfacing supply concerns, as prolonged Russia-Ukraine peace talks keep sanctions intact and raise risks of further restrictions. 

Our Stance: In currency markets, the GBP/USD exchange rate showed a modest uptick following the inflation release, suggesting a cautious reaction from traders. Looking ahead, preliminary PMI data for August is expected to offer further insight into the UK economy’s momentum, particularly within the services sector. While the projections point to continued growth, the pace is anticipated to hold steady, which may lead to only limited movement in the Pound unless figures surprise in either direction. Meanwhile, USD performance could be shaped by US jobless claims data, which remains a key area of focus for investors tracking the strength of the US labour market. 

FTSE 100 

The FTSE 100 is trading at 9,179.44, down 0.10%, yet holding firm above the key support zone of 8,900 and its 50-day SMA of 8,973.89. The Relative Strength Index (RSI) at 62.50 signals bullish momentum, although the index remains in a consolidation phase. Immediate support lies at 8,950, with a breach likely to trigger further downside. On the upside, resistance is around 9,280, and a breakout could pave the way for a short-term move toward 9,500. 

FTSE 100 Technical Chart, Source - EODHD/Others