London midday: FTSE nudges up; investors mull hotter-than-expected inflation print

(Sharecast News) - London stocks had nudged into the black by midday on Wednesday, as investors mulled a hotter-than-expected UK inflation print. The FTSE 100 was 0.1% firmer at 8,950.13.

Figures released earlier by the Office for National Statistics showed that annual inflation rose to 3.6% in June from 3.4% in May, versus expectations for it to remain unchanged. This marked the highest since January 2024, when it was 4.0%.

The ONS said transport, particularly motor fuels, made the largest upward contribution.

Food price inflation also increased for the third consecutive month, to 4.5% - its highest annual rate since February 2024.

Core inflation - which excludes energy, food, alcohol and tobacco - increased to 3.7% from 3.5%. Analysts were expecting it to remain unchanged.

ONS acting chief economist Richard Heys said: "Inflation ticked up in June driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year.

"Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year. However, it remains well below the peak seen in early 2023."

Martin Sartorius, principal economist at the Confederation of British Industry, said: "June's stronger-than-expected inflation print will raise concerns that recent price pressures - driven by higher household energy prices and the passthrough of increased employment costs - could potentially re-entrench inflation in the economy.

"While we still expect the Bank of England's Monetary Policy Committee to continue gradually cutting rates, today's upside inflation surprise means its August decision will be finely balanced. Underlying price pressures show signs of easing as the labour market cools, which should support a rate cut. However, some members of the MPC will be wary of loosening too quickly and, consequently, risk inflation remaining above target for longer."

In equity markets, Intermediate Capital Group was the standout performer on the FTSE 100 as it said assets under management rose 3% in the first quarter to $123bn, with fee-earning AUM up 4% to $82bn.

Elsewhere, Hiscox jumped after an upgrade to 'overweight' by Morgan Stanley.

Rio Tinto gained as it revealed that US tariffs added $300m in first half costs on aluminium exports from Canada, but also said that annual copper output would be at the higher end of estimates.

Rio said that while a "substantial" part of the extra cost was offset by higher premiums on US sales when the 25% tariff was introduced in March, the premium could no longer fully compensate when President Donald Trump doubled duties on Canadian aluminium to 50% in June.

The mining giant also said annual copper production was now expected to be at the higher end of estimates after a 13% rise in output during the second quarter due to the successful ramp up of the Oyu Tolgoi underground mine and good performance at Escondida.

Bloomsbury Publishing advanced as it said full-year results were on track to meet targets, driven by the ongoing popularity of blockbuster authors such as Sarah J Maas and JK Rowling.

Bytes Technology was boosted by an upgrade to 'buy' from 'hold' at Jefferies, which cited an attractive risk/reward.

On the downside, AstraZeneca fell after it said its investigational treatment for amyloidosis failed to show a statistical significance in late-stage trials. AL amyloidosis is a rare, progressive disorder caused by defective plasma cells in bone marrow.

Recruiter Hays was knocked lower by a downgrade to 'underweight' from 'equalweight' at Morgan Stanley.

Market Movers

FTSE 100 (UKX) 8,950.13 0.13% FTSE 250 (MCX) 21,691.54 0.00% techMARK (TASX) 5,159.16 -0.08%

FTSE 100 - Risers

Intermediate Capital Group (ICG) 2,042.00p 3.29% International Consolidated Airlines Group SA (CDI) (IAG) 383.10p 1.56% Hiscox Limited (DI) (HSX) 1,260.00p 1.45% Rio Tinto (RIO) 4,402.00p 1.29% Airtel Africa (AAF) 186.30p 1.25% 3i Group (III) 4,200.00p 1.20% Vodafone Group (VOD) 81.76p 1.19% Games Workshop Group (GAW) 16,200.00p 1.00% Lloyds Banking Group (LLOY) 76.94p 0.92% BP (BP.) 401.40p 0.90%

FTSE 100 - Fallers

Land Securities Group (LAND) 566.50p -1.90% Croda International (CRDA) 2,871.00p -1.75% CRH (CDI) (CRH) 7,000.00p -1.60% Convatec Group (CTEC) 240.60p -1.55% Smurfit Westrock (DI) (SWR) 3,385.00p -1.28% SEGRO (SGRO) 646.60p -1.28% Unite Group (UTG) 792.00p -1.25% Ashtead Group (AHT) 4,749.00p -1.12% AstraZeneca (AZN) 10,380.00p -1.11% Rentokil Initial (RTO) 340.90p -0.93%

FTSE 250 - Risers

Lion Finance Group (BGEO) 7,390.00p 3.79% Bloomsbury Publishing (BMY) 505.00p 3.70% Bytes Technology Group (BYIT) 338.80p 2.67% Senior (SNR) 187.80p 2.40% Foresight Solar Fund Limited (FSFL) 91.80p 2.23% Trustpilot Group (TRST) 277.40p 2.21% Ninety One (N91) 194.40p 2.15% W.A.G Payment Solutions (WPS) 87.20p 1.87% Bridgepoint Group (Reg S) (BPT) 341.40p 1.85% Clarkson (CKN) 3,395.00p 1.80%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 76.10p -4.76% Safestore Holdings (SAFE) 656.00p -2.45% Hays (HAS) 65.85p -2.08% XPS Pensions Group (XPS) 374.50p -1.83% British Land Company (BLND) 344.40p -1.82% QinetiQ Group (QQ.) 487.60p -1.73% Indivior (INDV) 1,132.00p -1.65% Empiric Student Property (ESP) 98.60p -1.60% Bodycote (BOY) 585.50p -1.60% B&M European Value Retail S.A. (DI) (BME) 230.60p -1.58%