FTSE 100 higher as it shrugs off inflation and interest rate concerns

FTSE 100 off to a strong start as miners rally

UK stocks made a strong start on Friday after an Nvidia-inspired charge on Wall Street overnight helped recede investor attention away from the rumbling US debt ceiling crisis.

Bumper earnings from chipmaker Nvidia indicated some substance behind the recent hype over AI as enormous players limber up for a battle for supremacy in this nascent market and acquire ready to spend on the infrastructure behind it.

AJ Bell investment director Russ Mould said: “The first cabinet-level talks between the US and China in months provided the backdrop for a rally in UK mining stocks, also supported by positive broker comment, and this helped to power the recede higher for the FTSE 100.

“In the UK’s domestic economy retail sales held up better than feared but the continuing ructions in the bond market raise the spectre of punishing rate increases following the unexpectedly sticky inflation numbers earlier this week. Chancellor Jeremy Hunt is on record as saying the pain of recession would be worth it to assist bring down the rate of inflation.

“Rising borrowing costs could derail the recent improvement in previously bombed out consumer sentiment and undermine the outlook for what has been an impressively resilient retail space.

“Later today the US will print its latest core inflation figures as the prospects for interest rates in the US and UK appear to diverge.”