A hot American inflation figure unsettles markets from New York to Tokyo

A hot number from Washington

American consumer prices rose more than expected in September. The Guardian put the annual rate at 3.7% and described it as a blow to Republicans ahead of the midterm elections. CNBC had said on Tuesday that the data was expected to show price increases accelerating. The figure arrived above even those expectations, the BBC reported.

Markets took it badly. The Wall Street Journal reported US stocks falling on the hot inflation report and an AI sell-off, with artificial intelligence and technology shares turning the indices lower during the afternoon. The dollar strengthened as Treasury yields rose, although the paper's live coverage had earlier recorded a spell in which yields turned lower as stocks slumped. One of its columns put the session into five words: inflation runs hot, stocks go cold.

Asia followed overnight. The Nikkei fell 2.9%, tracking Wall Street's losses. The South China Morning Post reported falls in mainland Chinese and Hong Kong shares, attributing them to concerns that the US figures would push the Federal Reserve towards tightening. Further afield, CNBC reported that a 'Godzilla El Niño' was wreaking havoc with the Philippine central bank's inflation forecasts.

Two pieces looked past the screens. CNBC examined how high inflation became a 'fact of life' in the United States, and the BBC gathered Americans describing household budgets under strain. 'It's rough out here,' ran the headline.

Banks, rates and the London view

The inflation figure landed in the middle of bank results. City A.M. reported that Wall Street banks had brought in a $22bn trading haul, quoting the view that 'it's hard to call the peak'. The Wall Street Journal said the AI boom was supercharging Wall Street's profits.

The same paper was less settled elsewhere. On Tuesday evening it argued that rising interest rates threatened to spoil the party for big banks, and on Wednesday it reported worries on Wall Street that Bank of America's problems would linger.

In London the rates debate ran the other way. Huw Pill, the Bank of England's chief economist and regarded as one of its hawks, said he was sceptical of market expectations for interest rates. This is Money reported that markets had been betting on four rate rises, taking Bank Rate to 4.75%, and presented his remarks as hope for mortgage borrowers. A senior Bank regulator, City A.M. reported, said UK banks could release their cash buffers to spur the economy. Separately, the heads of the Bank of England and the IMF warned of the cyber threat to trust in the financial system.

The domestic backdrop was soft. City A.M.'s morning coverage expected the FTSE 100 to slip, with the economy tipped to shrink. The IMF said Britain was raising taxes at the fastest rate in the G7, and This is Money reported that Healey, having ruled out more borrowing to fund Budget giveaways, was preparing further rises.

Listings, stakes and diesel

Away from the macro numbers, the pipeline of new listings kept moving. The BBC reported that Anthropic had flagged a revenue surge to investors ahead of its stock market debut. In China, the memory chip maker YMTC was expected to grow revenue six times faster than its peers as its own IPO approached, according to a report cited by the South China Morning Post.

London wants more of this traffic. Sky News reported that Downing Street had called in IPO candidates and investors for talks.

Deal news was varied. Berkshire Hathaway has built a 4% stake in Bending Spoons, the Wall Street Journal reported. Euronews said Lufthansa had beaten Air France-KLM to a €1.2bn stake in TAP Air Portugal. And the Guardian described refineries turning 'from liabilities to goldmines', with record profits in view on the back of a diesel shortage.

For individual savers, the shelf grew a little. HSBC launched a discretionary portfolio management service for retail investors, the South China Morning Post reported, and Moneybox added three ready-made funds while cutting its fees. This is Money, meanwhile, ran its comparison of stocks and shares ISA platforms. It was a day on which the deal-makers and product teams carried on regardless of the screens.