Economists said the Bank of England is in a tough spot, having to weigh decade-high inflation against the new Omicron coronavirus variant.
US stock futures fell on Tuesday as investors waited to see what would unfold from the two-day Federal Reserve meeting.
US stock futures marked modest gains Friday as investors anticipated the inflation data that is coming out today.
With COVID-19 cases exploding across Europe, the euro traded at its lowest in 17 months against the dollar, which got a boost from a hawkish Fed.
Americans hit the shops in October, driving retail sales to a new record despite inflation at 31-year highs, which fueled investor optimism.
Having absorbed the initial shock over US inflation running at 31-year highs, stocks traded cautiously higher, while the strong dollar weighed on oil.
Strong tech earnings offset the effect of a surge in bond yields to March 2020 highs, as investors rapidly priced in rate rises to beat inflation.
Inflation shot well above the Bank of England's target of 2% in August as the economy reopened.
Many Fed officials signalled on Wednesday that central bank asset purchase tapering will get underway this year, backed up by a monster jobs report.
Concerns about slowing growth in major economies China and the US were weighing on markets, as investors monitor rising geopolitical tensions around Afghanistan.
Car production plunged as the global microchip shortage disrupted manufacturing, weighing on UK GDP growth in May.
Clothes and meals out became more expensive as the economy reopened, pushing inflation above the Bank of England's target.
Inflation concerns eased as commodities including copper, lumber and nickel fell and investors waited for the Federal Reserve's next meeting.
Investors are weighing up what Friday's US jobs data mean for the Federal Reserve ahead of a key read of consumer inflation.
Oil prices sank as COVID-19 cases continued to rise and cause worry about economic recovery. US indices recovered from the shaky start to the week.
Burberry says its full-year performance will exceed expectations as the company experiences a strong rebound. Share price rose by as much as 10%.
With $1.9 trillion in stimulus now a certainty, risk assets such as stocks, emerging-market currencies, crude oil and copper rallied.