UK inflation surges and M&S lifts its dividend

UK prices have taken a lurch upward in the latest inflation data, while M&S has delivered a pleasant surprise for shareholders says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

UK consumers feel the heat

Rising bills are going to complicate things for UK consumers and the Bank of England too. Yesterday’s warning from the bank’s chief economist looks prescient, and policymakers will certainly be given pause following this morning’s figures. Overnight reports about certain politicians suggesting more tax rises, and the near certainty that the government will need to boost revenues in the autumn, mean that the tough times for consumers are on the way back, if indeed they ever went away at all.

Dividend boost for M&S shareholders

The hit from the cyber attack will dominate M&S coverage this morning, but a 20% increase in dividends is a firm statement of confidence in the future. But the bar is much higher now following the surge in its share price since 2022, and the return of inflation means M&S may well find its position under pressure as consumers have to become choosier about where they shop.