Blue chips in London outperformed European peers as investors weighed up inflation data and looked ahead to Thursday’s interest rate decision by the Bank of England.
The FTSE 100 index closed up 13.82 points, 0.2%, at 8,205.11. The FTSE 250 ended down 28.88 points, 0.1%, at 20,381.05, and the AIM All-Share closed up 0.82 of a point, 0.1%, at 777.50.
The Cboe UK 100 ended up 0.1% at 816.25, the Cboe UK 250 closed down 0.3% at 17,719.96, and the Cboe Small Companies ended up 0.6% at 16,729.11.
In European equities on Wednesday, the CAC 40 in Paris ended down 0.8%, while the DAX 40 in Frankfurt ended down 0.4%.
All eyes are on the Bank of England’s interest rate decision, which will be announced on Thursday at 1200 BST.
It is widely expected by markets that the BoE will leave rates unchanged at a 16-year high of 5.25%, however inflation data on Wednesday has prompted hopes of an August interest rate cut.
The UK CPI rate returned to the BoE’s target after nearly three years of loftier readings, numbers on Wednesday showed.
According to the Office for National Statistics, the rate of yearly consumer price growth faded to 2.0% in May, from 2.3% in April. The reading was in-line with the FXStreet cited consensus.
The rate of inflation stood as high as 11.1% in October 2022, but has faded, albeit in a bumpy fashion, since then. The rate of inflation last sat at the target range back in July 2021.
The central bank’s next decision following Thursday’s is on August 1. Unlike June’s rate call, August’s decision will be accompanied by the latest monetary policy report with economic projections, as well as a press conference with Governor Andrew Bailey.
Guy Foster, chief strategist at RBC Brewin Dolphin, said: ‘While headline inflation is now in line with the target, this inflation report does not support the idea of cutting interest rates. The good news is headline inflation has fallen back to the 2.0% target for the first time since July 2021. It is marginally above the BoE forecast but so marginally that this on its own doesn’t make it a hawkish print.’
The pound was quoted at $1.2723 at the London equities close Wednesday, higher compared to $1.2693 at the close on Tuesday.
The euro stood at $1.0745 at the European equities close Wednesday, up against $1.0736 at the same time on Tuesday. Against the yen, the dollar was trading at JP¥157.92, lower compared to JP¥157.97 late Tuesday.
In the FTSE 100, Berkeley lost 6.3%, making it the worst performer of the day.
Berkeley raised its guidance for the current financial year but cautioned that UK planning restrictions could hinder growth thereafter.
The Cobham, England-based housebuilder upped its pretax profit guidance for the current financial year ending April 2025 by 5% to £525 million. Its outlook for the following year was re-affirmed at £450 million.
But looking further ahead to financial 2027 to 2029, Berkeley cautioned that until the planning and regulatory environments unlock, alongside an inflection in the sales market, pre-tax profitability is anticipated to remain around the level to be delivered in financial 2026.
Other FTSE 100 housebuilders followed Berkeley lower. Barratt Developments, Persimmon, and Taylor Wimpey were down 2.7%, 2.8%, and 2.5%, respectively.
In the FTSE 250, Games Workshop shot up 9.2%.
The Nottingham, England-based miniature wargames maker and retailer said it anticipates annual pretax profit in the financial year ended June 2 to jump at least 17% to £200 million from £170.6 million a year prior.
Core revenue is set to be at least 10% higher at £490 million compared to £445.4 million.
On the other hand, Spectris shares tumbled 6.2%.
The London-based supplier of high-tech instruments, test equipment and software for industrial applications warned full-year profit would be below expectations after a system overhaul took longer than expected and amid tough trading conditions at Malvern Panalytical.
Amongst London’s small-caps, Speedy Hire jumped 7.5%.
In the financial year that ended March 31, the Merseyside-based tools and equipment hire service company reported that pretax profit nearly tripled to £5.1 million from £1.8 million the year before.
Revenue fell 4.3% to £421.5 million from £440.6 million, but cost of sales fell by even more, down 14% to £191.5 million from £221.6 million. Speedy Hire said the fall in revenue was in part due to a ‘softening’ in Regional customer markets.
Brent oil was quoted at $85.77 a barrel at the London equities close Wednesday, up from $85.02 late Tuesday. Gold was quoted at $2,325.80 an ounce at the London equities close Wednesday, higher against $2,324.20 at the close on Tuesday.
In Thursday’s UK corporate calendar, there are full year results from CMC Markets and DS Smith.
As well as the BoE interest rate decision on Thursday, there will be a rate decision from China overnight.
Also in the economic calendar, there is eurozone consumer confidence data. At 1330 BST, there is the US initial jobless claims data.
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