London open: FTSE edges up after UK inflation data, ahead of Fed

(Sharecast News) - London stocks edged higher in early trade on Wednesday as the latest UK inflation figures met expectations, and as investors eyed a policy announcement from the US Federal Reserve. At 0825 GMT, the FTSE 100 was up 0.2% at 8,212.48, while sterling was down 0.2% against the dollar at 1.2683.

Data released earlier by the Office for National Statistics showed that inflation reached 2.6% in November, the second consecutive rise.

Consumer price inflation rose in the 12 months to November to 2.6%, from 2.3% in October.

Largely in line with expectations, it was the highest print since March.

The ONS said the prices of motor fuel and clothing had driven the increase, although that had been partially offset by a bigger-than-normal fall in air fares.

Although fares traditionally dip around this time of year, the decline was the largest drop in November since records began.

On a monthly basis, CPI rose by 0.1%, compared with a fall of 0.2% a year previously.

Core CPI, which strips out the more volatile elements of energy, food alcohol and tobacco, rose by 3.5% in the 12 months to November, up from 3.3% in October.

The Bank of England will meet on Thursday to make its latest decision on interest rates and is widely expected to keep the cost of borrowing on hold.

The Monetary Policy Committee has trimmed rates twice this year, but remains hesitant about sticky services inflation.

The ONS said the CPI services annual rate was unchanged in November at 5.0%.

Paul Dales, chief UK economist at Capital Economics, said the further rebound in CPI inflation could have been worse.

"But coming on the back of the stronger-than-expected rebound in wage growth in yesterday's release, there is almost no chance of the Bank of England delivering an early Christmas present with another interest rate cut tomorrow," he said.

Looking to the rest of the day, eyes will be on the Fed interest rate decision at 1900 GMT.

Danske Bank said: "We expect a 25bp cut, which is also fully discounted by markets. Apart from the rate decision, market attention will be on the updated rate projections, and especially on the FOMC's latest view on the terminal rate level.

"We think Chair Powell will aim for a neutral tone in his remarks, but he is still likely to verbally open the door for slowing the pace of cuts."

In equity markets, BA and Iberia owner IAG flew higher after Jefferies hiked its price target on the stock to 350p from 270p.

DIY group Kingfisher gained as it announced the sale of its Brico Dépôt business in Romania to retailer Altex Romania for €70m.

Kingfisher said the divestment will give it "greater strategic focus on markets and growth initiatives where we are most strongly positioned to deliver attractive returns and create shareholder value".

Transact owner IntegraFin was in the red after full-year results.

Outside the FTSE 350, discount shoe retailer Shoe Zone tanked as it warned on profits and said it had been forced to close some stores due to changes announced in the Budget.

Market Movers

FTSE 100 (UKX) 8,212.48 0.21% FTSE 250 (MCX) 20,567.57 0.12% techMARK (TASX) 4,628.48 0.11%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 302.70p 1.82% BP (BP.) 384.70p 1.21% Ashtead Group (AHT) 5,140.00p 1.06% Kingfisher (KGF) 255.10p 0.95% Smith & Nephew (SN.) 988.80p 0.88% Next (NXT) 9,892.00p 0.88% Airtel Africa (AAF) 106.40p 0.85% Vistry Group (VTY) 658.50p 0.84% Rentokil Initial (RTO) 408.60p 0.84% Whitbread (WTB) 2,938.00p 0.75%

FTSE 100 - Fallers

Entain (ENT) 744.40p -1.01% AstraZeneca (AZN) 10,400.00p -1.01% Smurfit Westrock (DI) (SWR) 4,231.00p -0.52% Antofagasta (ANTO) 1,636.00p -0.40% Informa (INF) 813.00p -0.34% Rolls-Royce Holdings (RR.) 579.40p -0.28% CRH (CDI) (CRH) 7,642.00p -0.26% Tesco (TSCO) 373.30p -0.19% Rio Tinto (RIO) 4,813.00p -0.15% Diploma (DPLM) 4,360.00p -0.14%

FTSE 250 - Risers

CMC Markets (CMCX) 268.50p 5.29% Dr. Martens (DOCS) 77.35p 2.25% Schroder Oriental Income Fund Ltd. (SOI) 277.00p 2.21% Big Yellow Group (BYG) 984.00p 1.97% Edinburgh Worldwide Inv Trust (EWI) 195.40p 1.77% Foresight Group Holdings Limited NPV (FSG) 416.00p 1.71% PureTech Health (PRTC) 162.20p 1.37% Empiric Student Property (ESP) 84.00p 1.33% JPMorgan European Discovery Trust (JEDT) 446.00p 1.25% NextEnergy Solar Fund Limited Red (NESF) 65.10p 1.24%

FTSE 250 - Fallers

OSB Group (OSB) 389.20p -7.20% FirstGroup (FGP) 160.00p -2.79% IntegraFin Holding (IHP) 380.50p -2.44% Mitie Group (MTO) 107.20p -2.19% Rathbones Group (RAT) 1,604.00p -2.08% Grafton Group Ut (CDI) (GFTU) 928.40p -1.77% Tate & Lyle (TATE) 681.50p -1.45% Mobico Group (MCG) 78.65p -1.13% Kier Group (KIE) 146.40p -1.08% Bakkavor Group (BAKK) 137.50p -1.08%