In typical fashion the FTSE 100 dipped early on Tuesday in the face of strength in the pound.
AJ Bell investment director Russ Mould said: “With sterling at a 15-month high the value of the overseas earnings which dominate the index is relatively less. The reason for the pound’s move higher is today’s UK jobs data.
“While there are some signs the tightness in the labour market is starting to ease, wage growth remains uncomfortably high in the context of the Bank of England’s efforts to get surging prices under control.
“If inflation is like toothpaste, to borrow the well-worn analogy, then the Bank is likely to have to make a big mess of the economy trying to get it back in the tube. Borrowers face more pain with the prospect of further rate hikes to come.
“The US may still have more work to do in the inflation battle but it is certainly some way ahead of the UK – inflation data from across the Atlantic later this week will reveal just how far ahead it is.
“Given the uncomfortable headlines around Centrica’s British Gas operation and its treatment of vulnerable customers, it’s probably no bad thing the company is seen to be doing its bit for the UK’s energy security.
“It follows up the recommissioning and planned extension of the Rough energy storage facility with an $8 billion deal with US-based Delfin Midstream to buy enough liquefied natural gas to heat 5% of UK homes for 15 years.”