UK inflation surged to a 40-year high in September as the soaring food prices squeezed household budgets. The consumer price index rose 10.1%, compared with 9.9% in August, according to data published Wednesday by the Office for National Statistics. The new data shows inflation is back to the July peak of 10.1% and is once again at its highest since early 1982.

Soaring food, transport, and energy costs were the biggest contributing factors to inflation, the ONS said. Food rose 14.6% year-on-year, Transport rose 10.9% compared to last year, while the prices of furniture and household goods increased 10.8%.

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Sterling slipped against the dollar after the news, trading at $1.1289, down from $1.1330.

European stock markets opened higher on Wednesday but were flat within the first hour of trading. The Stoxx 600 index was down 0.2% at 9.00 am London time, with food and beverage, basic resources, and retail leading marginal losses.

Most sectors and key indexes are in the red, with the technology sector leading gains with 1.5%.

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As of 9.00 am London time, the FTSE 100 was down by 23.17 points or 0.33% at 6,913.57. The DAX in Germany traded 0.28% lower and the CAC 40 in France fell 0.22%.

Chipmaker ASML surged 7% after beating profit expectations and reporting record new bookings in the third quarter.

Oil prices remained stable above recent two-week lows, helped by signs of consistent US demand, the largest consumer in the world. US crude oil stocks fell by nearly 1.3 million barrels for the week ended October 14, according to data from the American Petroleum Institute data released on Tuesday.

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On Tuesday, the European Commission proposes setting temporary limits on daily gas trading levels to avoid price spikes.

Additionally, gold futures fell 0.4% to $1,648.45 per ounce, while EUR/USD traded 0.2% lower at 0.9835.

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Soaring inflation increases expectations that the Bank of England will raise interest rates further and faster as it struggles to return inflation to its 2% target. The Russia-Ukraine war has raised food and energy prices around the world, with supplies of oil, grain, and cooking oil disrupted. That has added to price rises that began last year as the global economy started to recover from the COVID-19 pandemic.