Stock prices in London were in the green on Wednesday morning after consumer price index inflation in the UK slowed below the 2% target in September, while blue-chip housebuilders rose after data showed that asking rents in the UK hit a new record high.
The FTSE 100 index opened up 55.09 points, or 0.7, at 8,304.57. The FTSE 250 was up 63.24 points, or 0.3%, at 20,857.68, and the AIM All-Share was up 1.19 points, or 0.2%, at 735.05.
The Cboe UK 100 was up 0.6% at 831.85, the Cboe UK 250 was up 0.1% at 18,389.85, and the Cboe Small Companies was down slightly at 17,056.82.
The Office for National Statistics reported that annual consumer price index inflation in the UK rose by 1.7% in September, slowed from 2.2% in August. This was short of the 1.9% rise that had been expected by FXStreet-cited market consensus.
On a monthly basis, prices were little changed in September, down from a rise of 0.5% in September 2023. Prices rose 0.3% in August, and fell 0.2% in July.
CPI including owner occupiers’ housing costs, or CPIH, rose 2.6% on-year in September, down from 3.1% in August. On a monthly basis, CPIH rose by 0.1% in September, down from 0.5% in September the year before.
Producer prices meanwhile fell 2.3% annually in September, from a revised decrease of 1.0% in August. On a monthly basis, producer input prices fell by 1.0%, accelerated from a 0.3% fall in August.
‘British inflation’s downward trajectory, combined with slowing wages growth, emphasizes Bank of England Governor Andrew Bailey’s latest comments that the bank will get ’more aggressive’ on its rate policy. That meaningful dovish shift in BoE stance, backed by inflation data, will likely send Cable back below the 1.30 level,’ said Swissquote Bank’s Ipek Ozardeskaya.
In European equities on Wednesday, the CAC 40 in Paris was down 1.0%, while the DAX 40 in Frankfurt was down 0.1%.
The European Central Bank is due to meet tomorrow, and is expected to announce another 25 basis point rate cut.
‘The headline inflation in the Eurozone lately dipped below the 2% policy target and European economies are struggling with Germany thought to be in mild recession. The only thing that could hold the ECB back from a dovish cut would be sticky core and services inflation. If that’s the case, the ECB could deliver a hawkish cut. In that case, we could see a rebound in the EURUSD but given the deteriorating fundamentals of the Eurozone and the resilience of the US economy, the single currency could and should lose more ground against the greenback,’ Ozardeskaya added.
The pound was quoted at $1.2988 early on Wednesday in London, lower compared to $1.3094 at the equities close on Tuesday.
In the FTSE 100, housebuilders rose on Wednesday morning.
Barratt Redrow rose 2.4%, Taylor Wimpey was up 1.9%, and Persimmon rose 1.7%.
Asking rents outside London have hit a new record high of £1,344 on average per month, having increased by 5.2% annually, according to a property website.
The average rent advertised for London properties also reached a new record of £2,694 per month, which was 2.5% higher than a year earlier, Rightmove said. The figures cover the third quarter of 2024 across Britain.
Rightmove said the average number of inquiries per rental property is now 15, down from 23 last year, but nearly double the eight recorded in 2019. The supply of homes available to rent has increased annually but is still below 2019 levels.
The euro stood at $1.0883, against $1.0950. Against the yen, the dollar was trading at JP¥149.27, down compared to JP¥149.29.
Rio Tinto rose 0.7%.
The Anglo-Australian mining firm posted third quarter results, which saw Pilbara iron ore shipments rise 1% year-on-year to 84.5 million tonnes. For 2024, Rio Tinto expects 323 to 338 million tonnes of Pilbara iron ore shipments, up from 331.8 million tonnes in 2023.
Rio Tinto said: ‘Lithium demand continues to grow with electric vehicle sales rising 20% year on year over the first eight months despite slower-than-expected uptake from Europe and the US.’
Last week Wednesday, Rio Tinto sealed a $6.7 billion acquisition of lithium chemicals producer Arcadium.
Also on the index, GSK rose 0.3%.
The US Food & Drug Administration has accepted a new drug application for gepotidacin, GSK’s investigational, first-in-class oral antibiotic with a novel mechanism of action for the treatment of female adults (and adolescents with uncomplicated urinary tract infections).
The FDA has granted priority review for this application and assigned a prescription drug user fee act action date of March 26, 2025.
In the FTSE 250, Moonpig gained 3.1%.
The firm said it aims to pay a total financial 2025 dividend of £10 million, with the first dividend under its new policy to be paid around March. The new policy commits to maintaining ‘robust dividend cover’ of 3x to 4x in the medium term.
Moonpig also announced a share buyback of up to £25 million, expected to start in early November. Looking ahead, it added that medium term targets remain unchanged, and said it is still aiming for double digit percentage annual revenue growth.
Elsewhere, Vertu Motors gained 3.7%, despite posting interim pretax profit of £22.1 million, down from £30.1 million a year prior.
Revenue inched up to £2.49 billion from £2.42 billion the year before, while the firm bumped its dividend per share to 0.90 pence, versus 0.85p.
Looking ahead, financial 2025 profit remains in line with current market expectations, after September’s performance delivered profit in line with prior year levels.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 1.8%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was up 0.5%. The S&P/ASX 200 in Sydney closed down 0.4%.
In the US on Tuesday Wall Street ended lower, with the Dow Jones Industrial Average and the S&P 500 both down 0.8% and the Nasdaq Composite down 1.0%.
Kamala Harris went after her US presidential election rival Donald Trump’s mental state and fitness for office Tuesday after the 78-year-old Republican’s televised town hall veered into a surreal, impromptu music session.
Three weeks ahead of the US election, Harris’s campaign has begun to focus aggressively on Trump’s health and mental stability, and was quick to weigh in, saying the ex-president appeared ‘lost, confused, and frozen on stage.’
At Monday’s event in Oaks near Philadelphia, a pause for two medical emergencies in the crowd turned into a bizarre 39 minutes of music and dancing as Trump abandoned the discussion of the election to put on his favorite hits, swaying awkwardly on stage.
‘Who the hell wants to hear questions, right?’ he said, bringing the Q&A section to an abrupt end and telling his people to crank up the volume. He then stayed on stage for nine songs, ranging from opera to Guns N’ Roses and Elvis, with the ex-president alternating his dance moves with standing in place and staring into the crowd.
‘Hope he’s okay,’ Harris opined dryly on X.
Brent oil was quoted at $74.62 a barrel early in London on Wednesday, up from $73.90 late Tuesday.
Gold was quoted at $2,674.20 an ounce, higher against $2,663.59.
Still to come on Wednesday’s economic calendar, there is a speech from eurozone European Central Bank President Christine Lagarde, and export and import prices from the US.
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