FTSE 100 predicted to open lower as China’s producer prices looked at

The FTSE 100 is expected to open lower this morning, as new figures showed China’s producer prices rose at the fastest pace in more than two years last month.

The producer price index rose 1.7% from a year earlier, according to National Bureau of Statistics data, compared with the median forecast for a 1.5% rise from a Reuters poll of analysts.

Resurgent producer prices raises the prospect of China exporting inflation to the rest of the world as factories start hiking prices for goods sold abroad, Bloomberg reported.

The blue chip index yesterday finished up up 0.2% higher or 11.21 points, at 6730.34. CMC Markets traders today expected the FTSE 100 to open 42 points lower at 6688.

David Madden, market analyst at CMC Markets said: “Overnight, China’s PPI rate swung from 0.3% in January to 1.7% in February, its highest reading since November 2018. The surge in prices at the factory level adds weight to the argument that higher inflation is in the pipeline as increases in costs at the factory level are likely to be passed on to consumers.”