FTSE 100 trades higher as US inflation data takes centre stage

The FTSE 100 is also trading in positive territory at midweek, currently standing at 10,690 points. UK equities continue to face significant price pressures stemming from elevated energy costs. The longer energy prices remain at these levels, the greater the likelihood of a more pronounced impact on inflation.

The Bank of England has already warned that while previous price spikes could be absorbed, persistently higher price levels are much harder to offset and will ultimately feed through into inflation. Against this backdrop, property stocks are attracting particular attention, as real estate is traditionally regarded as a good long-term hedge against inflation.

Investors are focusing particularly on today's US consumer price figures. The sharp increases in diesel and petrol prices recently are likely to have left their mark on inflation. US headline inflation is expected to have risen to 3.7% in September, up from 3.4% previously. Core inflation, meanwhile, could come in at 2.5% year on year, in line with market expectations.

The recently concluded diesel agreement between Russia and the US was aimed precisely at addressing this issue, highlighting its political significance rather than any substantial impact on the real economy. With US elections approaching, political pressure to counter rising prices is intensifying. Today's inflation figures could bring this challenge into even sharper focus.