The FTSE 250 index has been on an upward trend in the past few days as investors buy the dip in UK stocks. The index rose to £19,282, the highest level since June 28th of this year. It has jumped by more than 5.43% from its lowest level this year as the market cheer ongoing earnings from companies like 4Imprint, Wise, Royal Mail, DuneIm, Frasers, and PensionBee.
UK inflation soaring
The FTSE 250 index has been in a strong bullish trend in the past few days. The Office of National Statistics (ONS) data showed that the country’s consumer inflation rose to 9.4%, which was better than the median estimate of 9.3%. Inflation rose from 0.7% to 0.8% on a month-on-month basis. In the same period, core inflation dropped from 5.9% to 5.8%. Producer inflation also surged in June.
Therefore, analysts believe that the Bank of England (BoE) will continue hiking interest rates in the coming months. In a statement on Wednesday, Andrew Bailey said that the bank will likely consider hiking interest rates by 0.50% in August. If this happens, it will be the biggest hike by the bank in more than a decade. Historically, UK stocks tend to underperform in a period of high-interest rates.
The FTSE 250 index is also reacting to earnings of its key constituents. For example, the 4Imprint share price rose sharply after the company raised its forward outlook. Similarly, Wise rallied after the company said its users jumped and transaction volume rose to over 24 billion pounds.