LIVE: Wall Street lower, FTSE muted as UK set to see highest inflation rate in G7

A look at how the major markets are performing on Tuesday

FTSE Customers shop for bananas in the fruit and vegetable section of a Sainsbury's supermarket in east London on February 20, 2023. - British retail sales rebounded surprisingly in January on falling fuel costs and discounting by online and physical stores, official data showed Friday. At the same time, food sales dropped 0.5 percent, the ONS said, following large price rises over the past year. (Photo by Daniel LEAL / AFP) (Photo by DANIEL LEAL/AFP via Getty Images)
The FTSE was muted on Tuesday, giving up early gains as the UK is predicted to have the highest average inflation rate in the G7. Photo: Daniel Leal/AFP via Getty

The FTSE (^FTSE) gave up its early morning gains to trade just 0.1% higher by the end of the day amid news that the UK is set to see the highest average inflation rate in G7.

London's benchmark index was muted most of Tuesday, despite miners and oil majors gaining ground on the back of rallying crude prices. Meanwhile the CAC (^FCHI) was 0.1% lower in Paris, and the Frankfurt DAX (^GDAXI) was 0.5% on the day.

The Organisation for Economic Co-operation and Development (OECD) predicted UK inflation is set to come in at 7.2% for 2023, increasing its previous forecast of 6.9% from June. This would be the highest rate across the G7 and third highest across the G20.

Britain will also one of the worst performing advanced economies, with growth in 2023 only outpacing Germany and Argentina, while next year only Argentina will be below the UK.

The group downgraded its expectations for UK growth next year by 0.2 percentage points, saying it now expects the economy to expand by just 0.8% in 2024.

Meanwhile across the pond, Wall Street stocks were lower ahead of a interest rate decision from the Federal Reserve on Wednesday evening.

The S&P 500 (^GSPC) fell 0.6% by the time of the European close, and the tech-heavy Nasdaq (^IXIC) was down 0.7%. The Dow Jones (^DJI) was also 0.7% lower at the time of writing.

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It also came as oil prices hit $95 (£76.73) per barrel, a 10-month high, amid supply concerns.

Brent crude (BZ=F), the international benchmark, pushed to $95.28 per barrel during the morning, reaching its highest level since November 2022.

It is being driven higher by worries of a supply deficit after recent output cuts by Saudi Arabia and Russia, which have been extended until the end of this year.

Despite looking technically overbought, the upside momentum looks strong, with a combination of supply and demand drivers supporting the rally," Kyle Rodda, senior financial market analyst at, said.

"Of course, the big story here is the expected shortfall in supply flagged by OPEC+ last week. The cartel says it sees a deficit of 3 million barrels per day in the final quarter of this year, which would be the largest since 2007.

"The increase in oil price is fuelling higher yields, especially at the long end, although equity markets have proven surprisingly resilient."

Watch: How does inflation affect interest rates?

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