Markets respond to lower UK inflation and jump in treasury yields

<img width="250" height="151" src="https://www.leaprate.com/wp-content/uploads/2021/11/inflation-250×151.jpg" class="webfeedsFeaturedVisual wp-post-image" alt="" decoding="async" style="float: left; margin-right: 5px;" link_thumbnail="" srcset="https://www.leaprate.com/wp-content/uploads/2021/11/inflation-250×151.jpg 250w, https://www.leaprate.com/wp-content/uploads/2021/11/inflation-700×422.jpg 700w, https://www.leaprate.com/wp-content/uploads/2021/11/inflation-768×463.jpg 768w, https://www.leaprate.com/wp-content/uploads/2021/11/inflation-120×72.jpg 120w, https://www.leaprate.com/wp-content/uploads/2021/11/inflation-245×148.jpg 245w, https://www.leaprate.com/wp-content/uploads/2021/11/inflation-500×301.jpg 500w, https://www.leaprate.com/wp-content/uploads/2021/11/inflation.jpg 880w" sizes="(max-width: 250px) 100vw, 250px" /><p>According to Yahoo Finance, September’s public net sector borrowing in the UK came in at £14.3bn, 10% less than the year before. This year-on-year drop followed a significant decline in debt interest payments from £7.9bn to £0.7bn.</p>
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<p>Having closed 1.2% lower on Thursday, the FTSE continued its downward trend, falling by a further 1.2% by Friday afternoon. The DAX in Frankfurt and CAC in Paris mirrored this pattern, each dropping by 1.3% and 1.2% respectively.</p>
<p>US stocks reacted to the Federal Reserve’s statement confirming its commitment to higher <a href="https://www.leaprate.com/news/inflation-spikes-haunt-u-k-and-eurozone-in-september/" target="_blank" rel="noopener">interest rates</a> for more extended periods. This sentiment saw treasury yields gaining, with the yardstick 10-year yield increasing momentarily to 5% on Thursday.</p>
<p>While addressing the Economic Club of New York on Thursday, Jerome Powell, the Federal Reserve Chairperson, said:</p>
<blockquote><p>Additional evidence of persistently above-trend growth, or that tightness in the labour market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.</p></blockquote>
<p>In response, the S&amp;P 500 lost 0.8% in London, the Dow 0.4%, and the Nasdaq 1.3%. The brewing and escalating Israel-Hamas tensions on the Lebanon border are also stymying equity markets. Analysts warned that the persistently high rates may cause more market ruffles in the weeks to come.</p>
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