Good morning, and welcome to your new-look Business Today.
UK inflation has accelerated more than expected to an annual rate of 3.8% in July, driven by higher transport costs, such as air fares.
It’s the second month in a row that inflation has surprised on the upside.
It compares with an annual increase in the consumer prices index of 3.6% in June, according to the Office for National Statistics.
The core rate, which strips out food and energy, rose to 3.8% from 3.7%, also higher than expected.
Air fares rose by 30.2% between June and July, compared with a monthly rise of 13.3% a year earlier.
The increase is the biggest July increase since the collection of air fares changed from quarterly to monthly in 2001, and was probably influenced by the timing of school summer holidays.
Petrol and diesel prices also rose, with the average price of petrol up by 2p a litre between June and July while diesel rose by 2.9p a litre, compared with price declines in the same period last year.
On Wall Street, US tech stocks sold off yesterday amid warnings over the future of the artificial intelligence boom. A report from the Massachusetts Institute of Technology said “95% organisations are getting zero return” from their investments in generative AI.
The tech-heavy Nasdaq finished the day 1.46% lower, its biggest one-day decline since the start of August. The chipmaker Nvidia fell by 3.5% while the software group Palantir slumped by 9.4% and chip designer Arm lost 5%.
Asian markets followed in Wall Street’s footsteps, with Japan’s Nikkei down by 1.55% and Taiwan losing nearly 3%.
Today’s key events
• 10am BST: Eurozone inflation for July (final)
We’ll be tracking all the main events throughout the day on our business live blog …
