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Sterling softened on Wednesday and the FTSE 100 ended lower, as market participants weighed consumer price data which could pave the way for a UK rate cut in December. The FTSE 100 index closed down 44.89 points, 0.5%, at 9,507.41. The FTSE 250 ended 12.57 points lower, 0.1%, at 21,412.24, while the AIM All-Share rose 6.21 points, 0.9%, to 740.68. The Cboe UK 100 was down 0.3% at 950.49, the Cboe UK 250 was 0.4% higher at 18,565.48, and the Cboe Small Companies advanced 0.4% to 17,502.90. Consumer price data provided the early focus in London, coming in broadly in line with expectations, and offering encouragement that inflation has peaked. According to the Office for National Statistics, the consumer price index rose 3.6% in October from a year before, in line with market consensus cited by FXStreet, and slowing from a 3.8% annual rise in September. Annual service price inflation, a gauge closely watched by policymakers, cooled to 4.5% last month from 4.7% in September, compared to a 4.6% consensus. The reading could pave the way for the Bank of England to resume cutting rates in December. Threadneedle Street has maintained the UK bank rate at 4.00% for the past two meetings. It had cut in February, May and August. Peel Hunt’s Kallum Pickering explained that elevated inflation is a ‘serious headwind’ to economic growth. ‘It erodes real purchasing power, hurts the credibility of policymakers, harms confidence and puts upward pressure on nominal benchmark interest rates. But, short of further misguided policy choices, the worst is probably over,’ he said. Pickering expects the BoE to make a quarter-point rate cut at its December meeting, with two further cuts in the first half of 2026 to take the bank rate to 3.25% by mid-year. Deutsche Bank’s Sanjay Raja agrees that the BoE’s Monetary Policy Committee now has a ‘clearer path’ for a Christmas rate cut. ‘With the labour market softening more than expected, GDP growth weaker than the Bank of England projected, and (underlying) inflation tracking a little lower than BoE expectations, we think Governor Bailey who will likely have the deciding vote for December will feel more confident about cutting bank rate below 4%,’ he said. With a rate cut seen more likely, the pound fell back. Sterling was quoted at $1.3076 at the time of the London equities close on Wednesday, lower compared to $1.3141 on Tuesday. In European equities on Wednesday, the CAC 40 in Paris fell 0.2%, while the DAX40 in Frankfurt eased 0.1%. In New York, markets were mixed at the time of the London equity market close as investors gear up for Nvidia’s earnings. The Dow Jones Industrial Average was down 0.3%, the S&P 500 index was 0.3% higher, and the Nasdaq Composite advanced 0.5%. Santa Clara, California-based chip maker Nvidia reports third quarter results after the New York close, at around 2100 GMT. Kenneth Lamont of Morningstar explained that Nvidia’s results have become a ‘macro event, acting as a bellwether for the defining investment theme of our time.’ According to Visible Alpha consensus, analysts expect third-quarter revenue of $55.10 billion and earnings per share of $1.25. For fourth quarter guidance, VA consensus looks for revenue of $61.57 billion and EPS of $1.43. JPMorgan analyst Harlan Sur thinks another ‘solid beat-and-raise’ is on the cards, with the magnitude of potential upside again likely being governed by the extent to which Nvidia’s supply chain can scale up. ‘The key debates are less about the health of the demand environment and more about the ability of Nvidia’s sprawling supply chain and its broader supporting infrastructure to keep pace with customers‘ AI compute capacity rollout ambitions,’ Sur added. The yield on the US 10-year Treasury was at 4.12%, flat from Tuesday. The yield on the US 30-year Treasury was at 4.74%, also unchanged. The euro stood at $1.1536, lower against $1.1576. Against the yen, the dollar was trading higher at JP¥156.67, compared to JP¥155.44. On London’s FTSE 100, a rise in the gold price supported Fresnillo, up 5.8%, with Endeavour Mining, up 1.3%. Gold traded higher at $4,081.23 an ounce on Wednesday against $4,060.07 on Tuesday. JD Sports Fashion rallied 4.4% ahead of Thursday’s trading update, while ICG built on Tuesday’s progress, rising a further 4.1%. Sage was also in the green, up 1.2% after well-received full-year results. The Newcastle upon Tyne, England-based accountancy software provider said pretax profit rose 14% to £484 million in the financial year that ended September 30 from £426 million the year prior. In addition, the company raised its dividend by 6.8% and announced a £300 million share buyback. Chief Executive Officer Steve Hare, said Sage delivered ‘another good performance’ in the financial year with ‘strong, broad-based revenue growth and significant margin expansion.’ Defence stocks BAE Systems and Babcock International led the fallers, down 4.5% and 3.4% respectively, while lender Lloyds Banking fell a further 1.6% as rumours of a budget tax hike continue to swirl. On the FTSE 250, WH Smith rose 6.9% despite news that its chief executive has quit after a probe into its North American business found accounting errors. ‘Whilst the headlines are grim it really could have been a lot worse,’ analysts at Peel Hunt said. Deloitte, which undertook the review, blamed a ‘target-driven performance culture’ and ‘decentralised divisional structure combined with a limited level of group oversight of the finance processes in North America’ for the issues. There were ‘weaknesses’ in the composition of the finance team and ‘insufficient’ systems, controls and review procedures for supplier income across commercial and finance functions, it noted. WH Smith Chair Annette Court said: ‘This is an extremely serious matter that has had the board’s full attention, and we sincerely apologise for the shortcomings identified.’ Brent oil was quoted lower at $63.37 a barrel at the time of the London equities close on Wednesday, from $64.10 late Tuesday. The biggest risers on the FTSE 100 were Fresnillo, up 132.00 pence at 2,410.00p, JD Sports Fashion, up 3.40p at 80.40p, ICG, up 81.00p at 2,054.00p, Convatec, up 6.00p at 236.60p and Pershing Square, up 84.00p at 4,780.00p. The biggest fallers on the FTSE 100 were BAE Systems, down 80.50p at 1,724.50p, Babcock International, down 39.00p at 1,118.00p, St James’s Place, down 38.00p at 1,260.50p, Beazley, down 22.50p at 867.00p and Airtel Africa, down 6.60p at 295.60p. Thursday’s global economic calendar has an interest rate decision in China overnight, September nonfarm payrolls in the US and eurozone consumer confidence data. Thursday’s UK corporate calendar has half-year results from safety products manufacturer Halma and speciality chemicals maker Johnson Matthey, plus a trading statement from sports retailer JD Sports Fashion. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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