London pre-open: Stocks seen higher as inflation jumps past forecasts

(Sharecast News) - London stocks were set to rise at the open on Wednesday following a positive session in Asia, as investors digest the latest UK inflation data.

The FTSE 100 was called to open 24 points higher at 7,560.

Figures released earlier by the Office for National Statistics showed that UK consumer price inflation rose to 10.1% in July from 9.4% in June as food and energy prices jumped. This marked the highest rate since February 1982 and was above analysts' expectations of 9.8%.

Core inflation, which strips out food and energy costs, rose to 6.2% from 5.8% a month earlier.

Helen Dickinson, Chief Executive of the British Retail Consortium, said: "Consumers had little respite from the cost-of-living squeeze as prices rose again in July. Soaring household bills and transport costs remain the biggest headache, holding back discretionary spending across the UK as real incomes continued to fall.

"Retailers are trying to support their customers by expanding value ranges, fixing prices for some essential goods, offering discounted kids meals, and providing discounts for vulnerable groups. However, the sheer weight of costs bearing down on the industry and its supply chains has been proving impossible to fully absorb.

"With inflation showing little sign of slowing, retailers could face a 10% hike in their business rates bill in the coming year. This would impose a cost-nightmare of hundreds of millions of pounds on retailers who are already struggling with razor-thin margins. The next Prime Minister must act, freezing the multiplier to avoid placing a further burden on retailers, and the customers they serve."

In corporate news, housebuilder Persimmon posted a fall in interim profits, but reiterated completion guidance and said price rises were offsetting cost inflation.

The company said pre-tax profit for the six months to June 30 fell to £439.7 from £480m.

Total revenue fell to £1.68bn from £1.84bn, while completions fell to 6,652 from 7,406 against a strong comparator last year when demand for larger homes surged during the Covid pandemic.

Guidance of 14,500-15,000 completions for the full year was maintained.

Construction firm Balfour Beatty upgraded full-year guidance after interim profits more than doubled and new orders rose 10%.

The company posted a pre-tax profit of £83m, up from £35m a year earlier and now expects annual earnings to be ahead of previous expectations.