UK Stock Market Set for Lower Open Amid Inflation Fears

The UK stock market is expected to open lower on October 1, according to forecasts. The FTSE 100 IG Group futures contract predicts a fall of around 45 points (0.4%) to 10,561.40. This comes despite the weak close last quarter, as the index ended with a loss of 0.29% at 10,606.00.

The rising oil price may contribute to inflation worries and reinforce the notion that interest rates stay high for a long time. The Brent crude price was higher at $103 per barrel in recent market data. Increasing gilt yields will continue to be significant for UK stocks, with the markets having already priced in one 25-basis point interest hike by the Bank of England.

BoE member Alan Taylor pointed out that it was tough to address inflation without creating expectations for rate hikes. US 10-year treasury yields hit multi-year highs, adding to pressures on global equity valuations. The UK house prices numbers for September will be one of the major economic indicators to look out for on Thursday.