London pre-open: Stocks seen muted as inflation hits fresh 40-year high

(Sharecast News) - London stocks were set for a muted open on Wednesday as investors mulled the latest UK inflation data.

The FTSE 100 was called to open four points lower at 7,514.

Figures released earlier by the Office for National Statistics showed that inflation hit a fresh 40-year high of 9% in April after energy prices surged.

The headline consumer price index rose to 9.0% from 7% in March. It is the highest reading since comparable readings in 1982, although the figure was also marginally below consensus expectations of 9.1%.

Including owner occupiers' housing costs, the index rose by 7.8% in the 12 months to April, from 6.2% in March.

The largest upward contribution to annual CPIH inflation was housing and household services, which includes electricity, gas and other fuels. In April, the energy bills rose by 54% in response to surging wholesale prices.

Transport costs also weighed heavily, rising 1.47 percentage points as the cost of motor fuels continue to rise.

Naeem Aslam, chief market analyst at Ava Trade, said: "Inflation in the UK is completely out of control, and there is no doubt soaring inflation is having a negative influence on disposable income.

"Consumers are struggling to meet their daily needs and now the pressure is even more on the Bank of England to do more to control inflation. But it is walking a fine line, and can only do so much to control inflation by increasing the interest rate."

In corporate news, specialist media publisher Future reported a rise in first-half profits on Wednesday, driven by revenue growth and contributions from acquisitions.

The company said pre-tax profit for the six months to March 31 rose 42% to £81m. Revenue rose 48% to £404.3m.

Luxury watch retailer Watches of Switzerland said it experienced a "stellar end" to the year ended 1 May, with revenues surging in the final quarter.

Watches of Switzerland stated fourth-quarter group revenues had grown 48% year-on-year to £304.0m, with US revenues up 50% to £136.0m following the opening of flagship store in Cincinnati, Ohio, while UK revenues shot up 47% to £168.0m. For the year as a whole, group revenues were up 40% at £1.23bn, with US revenues growing 48% to £428.0m and UK revenues up 36% to £810.0m.