Nearly 86% of Japanese households expect prices to rise a year from now, a survey showed on Thursday. It comes as a sign of heightening inflation expectations that could help the central bank make the case for additional interest rate hikes.

Reuters has the details...

The ratio of households that expect prices to rise a year from now stood at 85.6% in September, down from 87.5% in the previous survey taken three months ago, a survey by the Bank of Japan (BOJ) showed.

Of the total households surveyed, 83.6% said they expect prices to rise five years from now, up from 82.0% in the previous survey in June.

In a sign of the pain of rising living costs, food and daily necessities topped the list of items the respondents said they increased spending on compared with a year ago.

Dine-outs, clothing and travel were the top three items households reduced spending for compared with a year before, the survey showed.

The BOJ ended negative interest rates in March and raised short-term borrowing costs to 0.25% on the view Japan was making progress towards durably achieving its 2% inflation target.

Japan's core consumer inflation hit 2.8% in August, exceeding the BOJ's 2% target for well over two years, keeping alive expectations for further interest rate hikes.

Shares in GSK (GSK.L) have jumped as much 6.5% in early trade after it agreed to settle US litigation over its heartburn treatment Zantac.

The pharmaceuticals group said last night that it has struck agreements with 10 plaintiff law firms who represent about 93%, roughly 80,000, of the US state court product liability cases pending against it over Zantac. The company will pay up to $2.2bn to settle the claims.

Russ Mould of AJ Bell said:

Hurricane Milton is expected to cost insurers at much as $60bn (£45.9bn) as it triggers flash flooding warnings across the state of Florida.

Up to nine inches of rain have fallen so far in Orlando, with three to six more inches expected.

Some 19 tornadoes have struck, killing at least two pensioners as Hurricane Milton generated powerful storm surges and freak winds.

Analysts at Morningstar DBRS estimated that the initial losses for insurers could rise to as much as $100bn (£76.5bn) and compared Hurricane Milton’s impact to that of Hurricane Katrina, which devastated the city of New Orleans and its surrounding area in 2005.

The credit rating agency said:

Rachel Reeves may need to raise up to £25bn from tax increases if she wants to keep public spending rising with national income, the Institute for Fiscal Studies (IFS) estimates.

Even if the chancellor changes the debt rule she inherited from the Tories, this would do “almost nothing” to ease the challenge on public service funding, the IFS said as it released its Green Budget report.

The thinktank said:

The report, funded by the Nuffield Foundation and using economic forecasting by Citi, analysed the challenges facing the Chancellor.

IFS director Paul Johnson said Ms Reeves’ first Budget, which she will deliver on 30 October, could be “the most consequential since at least 2010”.

In a scenario modelled by Citi, the report concluded that if there are no cuts to spending outside of public services, Ms Reeves would need a tax rise of £16 billion to remain on course to balance the budget in 2028-29.

This would be on top of the £9 billion tax rise from measures set out in Labour’s manifesto – adding up to almost £25 billion in total.

But the party’s pledges not to raise income tax and corporation tax or to increase National Insurance or VAT mean she may struggle to implement a tax rise on that scale.

It would be bigger than the net tax rises from July 1997 and October 2010, which were both around £13-£14 billion.

People have been paying homage to Indian business leader Ratan Tata who died on Wednesday night, in the lawns of the National Centre for the Performing Arts (NCPA), in Mumbai, India.

Tata, who acquired several UK companies during his career including tea firm Tetley, Anglo-Dutch steelmaker Corus, and car brands British Jaguar and Land Rover, died aged 86 yesterday.

His coffin, draped in an Indian flag, was flanked by a guard of honour, with a marching band of trumpets and drums accompanying the procession.

Mumbai has declared a day of mourning, with the funeral rites to take place this afternoon.

Indian prime minister Narendra Modi led the tributes, calling Tata “a visionary business leader, a compassionate soul and an extraordinary human being”.

Renting in the UK is becoming harder as demand continues to grow and outstrip supply.

RICS said on Thursday that demand from tenants increased again last month, while there was a drop in the number of properties listed for rent.

This is possibly because landlords are fearful of capital gains tax (CGT) changes in the budget this month.

The struggle to rent property has already led to a rise in rough sleeping last year. Homelessness charities warned yesterday that rough sleeping will head back towards record levels unless the government addresses a looming £1bn shortfall in frontline funding.

House prices are climbing across the UK overall for the first time in two years as the property market is boosted by expectations of more interest rate cuts by the Bank of England, which would bring down mortgage costs.

Demand, sales, and new listings all grew in September, the Royal Institution of Chartered Surveyors (RICS) said. A balance of 16% of professionals reported prices increasing in September, up from a flat 0% result in August and the first positive reading since October 2022.

A net balance of 14% of professionals reported an uptick in buyer demand, while 5% reported an increase in sales. Looking ahead, 23% anticipate further sales growth in the next three months, and 45% expect an upturn over the next year.

Additionally, 22% of professionals reported a rise in new property listings. This increase is partly attributed to speculation surrounding a potential rise in capital gains tax, which has prompted some homeowners to list their properties sooner than they might have otherwise.

The report added it appeared to be a greater level of positivity in the market, likely connected to recent interest rate cuts by the Bank of England and a growing belief that more will come in the next few months.

Tarrant Parsons, RICS head of market analytics, said:

Stocks in Asia rose overnight with the Nikkei (^N225) up 0.3% on the day in Japan, and the Hang Seng (^HSI) surging 3% in Hong Kong. The Shanghai Composite (000001.SS) was 1.3% up by the end of the session.

China and Hong Kong share prices rose after the People’s Bank of China kicked off a swap programme aimed at supporting the stock market, while investors await directions from further policy announcements.

The central bank said it would start accepting applications for its 500-billion-yuan ($70.62 billion) swap facility from financial institutions a move aimed at channelling more cash into the stock market.

Investors were also boosted by new highs set on Wall Street as the Dow (^DJI) and S&P 500 (^GSPC) closed at record levels.

The Dow Jones Industrial Average rose 1% to 42,512.00, the S&P 500 rose 0.7% to 5,792.04, and the tech-heavy Nasdaq Composite (^IXIC) rose 0.6% to finish at 18,291.62.

The yield on 10-year US Treasury notes rose to 4.07% from 4.02% late on Tuesday.

Good morning, and welcome back to our markets live blog. As usual we will be taking a look at what's moving markets and happening across the global economy.

Here's a quick look at what's on the agenda for today...

• 7am: Trading updates: Brown Group, Centaur

• 9.30am: Bank of England’s credit conditions survey

• 10am: Post Office chief executive, Nick Read, to give evidence at the Horizon IT inquiry for the second day

• 12:30pm: US Continuing Claims

• 1.30pm: US inflation report for September