London, U.K. — UK markets received an unexpected boost on Tuesday, with the FTSE 100 closing the day at a one-month high of 5589.16 after government data revealed that UK inflation dropped unexpectedly to 2.8% in May, inching closer towards the government’s 2% target and fuelling speculation of another QE announcement by the Bank of England as early as next month.

The fall in inflation goes some way towards easing the pressure off the Bank of England and throws open the door for the Bank to inject another round of QE to jumpstart the stalled UK economy.

Tuesday’s CPI figure of 2.8% comes on the back of a fall to 3% in April and has been fuelled, in part, by falling fuel, energy and food prices and the diminishing impact of the VAT rise last year.

The FTSE 100 has taken heart from this positive number, momentarily forgetting the woes of the larger eurozone crisis and charging higher to close up 1.7% on the day.

Tuesday’s inflation data offers spread betting investors a chance to profit from this sudden jump on the FTSE 100, enabling you to profit irrespective of whether the index climbs higher, or falls lower in the coming days.

With spread betting, you can profit not just when markets are rising, but when prices are on the decline as well. This means that as an investor, if you believe that the current upswing in the FTSE 100 is short-lived and that the markets will tumble lower in the days to come on account of the eurozone crisis, you can take a short position on the FTSE 100. If you were right and the FTSE moves in the direction you had expected, you stand to make a profit; else you make a loss.

Similarly, if you expect that the stimulus package will have the desired impact on the UK economy, jolting it out of the recession, you could go long (or buy) the FTSE 100 index. You would then make a profit for every point that the index moves in the direction you had indicated. Else you would make a loss.

Spread betting is a tax-free* alternative to conventional trading and presents an excellent way of taking a position during volatile markets conditions, such as the present. Find out more about how you can take a spread betting position on over 12,000 individual markets with Finspreads.

Finspreads is a leading online financial spread betting firm, offering access to thousands of instruments on the world’s financial markets.

The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.

Image Courtesy of  Nick Atkins Photography

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