UK Inflation Eases to 2.8% in April Amid Energy Price Cap
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 20 2026
0mins
Source: CNBC
- Inflation Data Decline: The UK's inflation rate fell to 2.8% in April from 3.3% in March, primarily due to the energy price cap implemented on April 1, indicating the initial effectiveness of government support measures.
- Energy Cost Pressures: Despite the decline in inflation, consumer prices are expected to continue rising due to increased energy costs stemming from the Iran conflict, posing challenges to economic recovery, especially against a backdrop of a weakening labor market.
- Central Bank Policy Focus: The Bank of England is closely monitoring price increases and their impact on wages and business costs, with market expectations leaning towards a 25 basis point rate hike in July, raising the Bank Rate to 4% to combat potential inflationary pressures.
- Weak Economic Growth: Although inflation has eased, sluggish economic growth and an unemployment rate rising to 5% may limit the central bank's ability to raise rates, with economists predicting that the Bank may opt to hold rates steady at the June policy meeting to avoid further strain on the fragile economy.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NMR?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on NMR
About NMR
Nomura Holdings Inc is a Japan-based company mainly engaged in the securities, investment, and other financial services business across the world. The Company has three business segments. The Sales segment provides investment consultation services to individual clients in Japan. The Investment Management segment provides investment management services and investment solutions, including the establishment and management of investment trusts, discretionary investment services for domestic and foreign investors, fund management and administration for investment corporations and institutional investors, and silent partnership management. The Wholesale segment is engaged in the sale and trading of bonds, equity securities, derivatives, and foreign exchange, as well as investment banking services such as the bonds and securities underwriting business, merger and acquisition (M&A) business and financial advisory services. The Company operates in Japan, the Americas, Europe, Asia and Oceania.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Yen Gains as Japan Eyes Fiscal Responsibility Post Election
- Yen Weakness Alert: On Tuesday, the yen fell to 162.27 against the dollar, marking a four-decade low, which heightened market vigilance regarding potential intervention from Japanese authorities, indicating the economic risks posed by currency volatility.
- Government Intervention Preparedness: Japan's Finance Minister Satsuki Katayama stated that the government is ready to take appropriate action against excessive currency fluctuations, emphasizing the importance of coordination with the U.S. to address market instability.
- Short-lived Market Reaction: Nomura's North Asia Chief Investment Officer Julia Wang noted that while yen depreciation could trigger intervention, its impact on broader markets is expected to be short-lived, reflecting a cautious market attitude towards the effectiveness of such interventions.
- Interest Rate Policy Adjustment: The Bank of Japan recently raised its benchmark interest rate to 1%, the highest level in over three decades, aimed at tackling inflationary pressures exacerbated by rising energy prices, demonstrating a commitment to monetary policy normalization.
See More
Bank of America Upgrades Nomura to Buy Amid Earnings Improvements
- Rating Upgrade: Bank of America upgraded Nomura from neutral to buy, primarily based on improvements in earnings and return on equity, indicating the firm's performance is strengthening under market conditions, which is expected to drive stock price increases.
- Market Sensitivity: Despite Nomura's historically volatile earnings, recent performance improvements have widened the gap to its price objective, demonstrating the company's resilience in uncertain market environments, potentially attracting more investor attention.
- Tesla Fundamentals Analysis: Barclays reiterated Tesla as equal weight, noting that its stock price is almost entirely narrative-driven, with fundamentals like Q2 deliveries and margins increasingly overlooked, which could lead to misjudgments about future performance by investors.
- Emerging Market Opportunities: Benchmark initiated coverage of Pinnacle Financial Partners with a buy rating, believing that management's execution over the next few quarters will improve its relative valuation, showcasing the company's competitive advantages and growth potential in regional markets.
See More
Yen Rises on Policy Signals Amidst Economic Challenges
- Yen Exchange Rate Volatility: Bank of Japan Governor Kazuo Ueda's hints at a near-term rate hike have not prevented the yen from languishing around the 160 level, indicating limited policy effectiveness and potential market confidence issues.
- Cost of FX Intervention: Japanese Finance Minister Satsuki Katayama has deployed over 11.7 trillion yen ($72.8 billion) to support the yen, yet the market's muted response suggests that the intervention measures have limited short-term impact.
- Structural Factors at Play: Despite the BOJ raising rates to a three-decade high, U.S. Treasury yields remain high at 4.451%, making carry trades attractive and exacerbating downward pressure on the yen.
- Political Factors Interfering: The Japanese government's preference for easy monetary policy to stimulate growth limits capital inflows, and the dovish stance of newly appointed BOJ board members may influence future monetary policy directions.
See More
China's Trade Growth Exceeds Expectations in May
- Strong Export Growth: In May, China's exports rose by 19.4% year-on-year, surpassing economists' expectations of 15%, indicating robust demand for AI-related products that supports the economy despite weak overall demand.
- Continued Import Surge: Imports increased by 27.4% in May, up from 25.3% in April, primarily driven by specific categories like semiconductors and gold, suggesting strong import demand despite high cost pressures.
- Weak Domestic Consumption: Despite strong exports, domestic consumption remains weak, with retail sales growth expected to fall to zero in May, reflecting the fading impact of trade-in subsidies and increasing risks of economic slowdown.
- Rising Producer Prices: Producer Price Index is expected to accelerate to 3.8% in May, the highest level in nearly four years, indicating manufacturers are absorbing higher input costs, while consumer inflation is projected to be modest at 1.3%.
See More
Foreign Investors Dump $801 Million in South Korean Stocks Amid Record Kospi Gains
- Foreign Selling Pressure: As of Monday, foreign investors had unloaded a net 1.24 trillion won (approximately $801 million) worth of Kospi-listed shares, indicating ongoing outflows despite the Kospi's strong performance this year.
- Structural Market Dynamics: Analysts from Goldman Sachs noted that the selling was primarily driven by outflows from the Kospi Tech and Auto sectors, reflecting forced selling due to the market's success, as foreign investors adjust their portfolios.
- Domestic Investor Resilience: Despite the foreign selling, domestic investors have countered this trend with an estimated $70 billion in retail inflows, demonstrating strong confidence in the Korean stock market.
- Robust Fundamentals: Market veterans maintain that the fundamentals of Korean equities remain solid, with Goldman Sachs raising its 12-month Kospi target to 12,000, suggesting a potential upside of 37% in the near future.
See More
Foreign Selling of South Korean Stocks Exceeds $62 Billion
- Intensified Foreign Selling: As of late May, foreign investors have offloaded approximately $62 billion worth of South Korean stocks, despite the Kospi's strong performance globally, indicating that the selling is more related to market success than deteriorating fundamentals.
- Structural Market Pressures: The rapid rise of the Korean stock market has significantly increased foreign investors' weightings in global and emerging market benchmarks, forcing many active fund managers to trim their positions to adhere to portfolio and risk limits.
- Domestic Investor Inflows: Despite ongoing foreign selling, a wave of domestic buying has compensated for the outflows, with retail inflows estimated at $70 billion this year, demonstrating the market's resilience.
- Optimistic Future Outlook: Goldman Sachs has raised its 12-month Kospi target to 12,000, forecasting a further 37% upside, indicating that despite the selling pressure, the fundamentals of the Korean equity market remain robust.
See More
Yen Gains as Japan Eyes Fiscal Responsibility Post Election
- Yen Weakness Alert: On Tuesday, the yen fell to 162.27 against the dollar, marking a four-decade low, which heightened market vigilance regarding potential intervention from Japanese authorities, indicating the economic risks posed by currency volatility.
- Government Intervention Preparedness: Japan's Finance Minister Satsuki Katayama stated that the government is ready to take appropriate action against excessive currency fluctuations, emphasizing the importance of coordination with the U.S. to address market instability.
- Short-lived Market Reaction: Nomura's North Asia Chief Investment Officer Julia Wang noted that while yen depreciation could trigger intervention, its impact on broader markets is expected to be short-lived, reflecting a cautious market attitude towards the effectiveness of such interventions.
- Interest Rate Policy Adjustment: The Bank of Japan recently raised its benchmark interest rate to 1%, the highest level in over three decades, aimed at tackling inflationary pressures exacerbated by rising energy prices, demonstrating a commitment to monetary policy normalization.
See More
Bank of America Upgrades Nomura to Buy Amid Earnings Improvements
- Rating Upgrade: Bank of America upgraded Nomura from neutral to buy, primarily based on improvements in earnings and return on equity, indicating the firm's performance is strengthening under market conditions, which is expected to drive stock price increases.
- Market Sensitivity: Despite Nomura's historically volatile earnings, recent performance improvements have widened the gap to its price objective, demonstrating the company's resilience in uncertain market environments, potentially attracting more investor attention.
- Tesla Fundamentals Analysis: Barclays reiterated Tesla as equal weight, noting that its stock price is almost entirely narrative-driven, with fundamentals like Q2 deliveries and margins increasingly overlooked, which could lead to misjudgments about future performance by investors.
- Emerging Market Opportunities: Benchmark initiated coverage of Pinnacle Financial Partners with a buy rating, believing that management's execution over the next few quarters will improve its relative valuation, showcasing the company's competitive advantages and growth potential in regional markets.
See More
Yen Rises on Policy Signals Amidst Economic Challenges
- Yen Exchange Rate Volatility: Bank of Japan Governor Kazuo Ueda's hints at a near-term rate hike have not prevented the yen from languishing around the 160 level, indicating limited policy effectiveness and potential market confidence issues.
- Cost of FX Intervention: Japanese Finance Minister Satsuki Katayama has deployed over 11.7 trillion yen ($72.8 billion) to support the yen, yet the market's muted response suggests that the intervention measures have limited short-term impact.
- Structural Factors at Play: Despite the BOJ raising rates to a three-decade high, U.S. Treasury yields remain high at 4.451%, making carry trades attractive and exacerbating downward pressure on the yen.
- Political Factors Interfering: The Japanese government's preference for easy monetary policy to stimulate growth limits capital inflows, and the dovish stance of newly appointed BOJ board members may influence future monetary policy directions.
See More
China's Trade Growth Exceeds Expectations in May
- Strong Export Growth: In May, China's exports rose by 19.4% year-on-year, surpassing economists' expectations of 15%, indicating robust demand for AI-related products that supports the economy despite weak overall demand.
- Continued Import Surge: Imports increased by 27.4% in May, up from 25.3% in April, primarily driven by specific categories like semiconductors and gold, suggesting strong import demand despite high cost pressures.
- Weak Domestic Consumption: Despite strong exports, domestic consumption remains weak, with retail sales growth expected to fall to zero in May, reflecting the fading impact of trade-in subsidies and increasing risks of economic slowdown.
- Rising Producer Prices: Producer Price Index is expected to accelerate to 3.8% in May, the highest level in nearly four years, indicating manufacturers are absorbing higher input costs, while consumer inflation is projected to be modest at 1.3%.
See More
Foreign Investors Dump $801 Million in South Korean Stocks Amid Record Kospi Gains
- Foreign Selling Pressure: As of Monday, foreign investors had unloaded a net 1.24 trillion won (approximately $801 million) worth of Kospi-listed shares, indicating ongoing outflows despite the Kospi's strong performance this year.
- Structural Market Dynamics: Analysts from Goldman Sachs noted that the selling was primarily driven by outflows from the Kospi Tech and Auto sectors, reflecting forced selling due to the market's success, as foreign investors adjust their portfolios.
- Domestic Investor Resilience: Despite the foreign selling, domestic investors have countered this trend with an estimated $70 billion in retail inflows, demonstrating strong confidence in the Korean stock market.
- Robust Fundamentals: Market veterans maintain that the fundamentals of Korean equities remain solid, with Goldman Sachs raising its 12-month Kospi target to 12,000, suggesting a potential upside of 37% in the near future.
See More
Foreign Selling of South Korean Stocks Exceeds $62 Billion
- Intensified Foreign Selling: As of late May, foreign investors have offloaded approximately $62 billion worth of South Korean stocks, despite the Kospi's strong performance globally, indicating that the selling is more related to market success than deteriorating fundamentals.
- Structural Market Pressures: The rapid rise of the Korean stock market has significantly increased foreign investors' weightings in global and emerging market benchmarks, forcing many active fund managers to trim their positions to adhere to portfolio and risk limits.
- Domestic Investor Inflows: Despite ongoing foreign selling, a wave of domestic buying has compensated for the outflows, with retail inflows estimated at $70 billion this year, demonstrating the market's resilience.
- Optimistic Future Outlook: Goldman Sachs has raised its 12-month Kospi target to 12,000, forecasting a further 37% upside, indicating that despite the selling pressure, the fundamentals of the Korean equity market remain robust.
See More
