The Doom & Gloom Deepens

18/10/11 -- Where do I start? UK CPI inflation is now at it's highest since they came up with the idea in 1997, rising to 5.2% in September from 4.5% in August. A hefty rise in just one month and a sign of things to come methinks.

The old fashioned measure of RPI rose to 5.6% - the highest since 1991. Don't panic though, Mervyn King assures us that he's got everything under control and inflation will start to fall again in 2012. Except he hasn't and it won't.

Moody's have warned France that they face a ratings outlook downgrade from their current AAA status. No surprises there then given their exposure to Greek, Italian and Spanish debt.

News that China's economic expansion slowed in Q3 may confirm that the debt crisis in Europe is having a knock-on effect elsewhere around the globe.

The grain markets are feeling nervous with the overnight Globex trading around 20 cents lower on beans and 6-8 cents weaker on wheat and corn. London wheat is GBP0.90/tonne lower on front month Nov, with Paris wheat down a euro or so and Paris rapeseed in the region of EUR4.00/tonne weaker.

G20 chair France say that speculation in commodities, biofuel production and land use issues will be on the table for discussion at their forthcoming meeting at the beginning of November. We may see a bit more money taken off the table in the run-up to that one then.