UK Grocery Inflation Slows to 2.6%, Defence Stocks Rally Amid Political Shift

UK grocery inflation decelerated to 2.6% in the four weeks ending July 12th, marking its lowest rate since December 2024. This represents the fifth consecutive month of easing price rises, according to Worldpanel by Numerator data. While a welcome development for consumers, the cumulative impact of past inflation remains evident, with the average household spending £5,530 on groceries over the past year to July, an increase of £156 compared to the same period last year. Separately, defence stocks experienced a rally following the appointment of John Healey as Chancellor. This political development coincided with news that the UK's government borrowing in June was less than anticipated, suggesting potential fiscal headroom or more controlled public finances. In related corporate news, L&VW expressed willingness to enhance collaboration between local government, regulators, and Thames Water. The consortium proposed granting greater public controls over critical business issues, including the implementation of a 'golden share,' to improve the delivery of essential infrastructure projects and foster shared accountability. This move aims to address governance and operational challenges within a vital utility provider.