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Stock prices in London rose at Wednesday midday amid strengthened expectations that the Bank of England will announce an interest rate cut on Thursday, after UK inflation cooled more than anticipated in November. The FTSE 100 index was up 159.04 points, 1.6%, at 9,843.83. The FTSE 250 was up 214.66 points, 1.0%, at 22,255.64, and the AIM All-Share was up 3.64 points, 0.5%, at 753.05. The Cboe UK 100 was up 1.6% at 986.75, the Cboe UK 250 was up 0.9% at 19,322.49, and the Cboe Small Companies was up 0.1% at 17,280.28. The Bank of England and the European Central Bank are due to announce their respective interest rate decisions on Thursday, with the BoE widely expected to cut rates and the ECB expected to leave policy unchanged. ‘A lower-than-expected reading of inflation has reinforced expectations for a Bank of England rate cut tomorrow and helped the FTSE 100 to post solid gains on Wednesday morning,’ said AJ Bell head of markets Dan Coatsworth. ‘The inflation data saw a drop in sterling which helps flatter the dominant overseas earnings in the UK’s flagship index. ‘Housebuilders posted solid gains on the implied implications for rates, which should help support demand if mortgages become more affordable,’ Coatsworth added. UK inflation eased in November, with both headline and core measures slowing as food, alcohol and tobacco prices fell, according to figures published on Wednesday by the Office for National Statistics, ahead of the Bank of England’s policy decision on Thursday. The consumer prices index including owner occupiers’ housing costs, or CPIH, rose 3.5% in the 12 months to November, down from 3.8% in October. The annual inflation rate for food and non-alcoholic beverages decelerated to 4.2% in November from 4.9% in October. On a month-on-month basis, CPIH fell 0.1% in November, compared with a 0.2% rise in the same month last year. Headline consumer prices index inflation also eased. CPI rose 3.2% year-on-year in November, down from 3.6% in October and below the FXStreet-cited consensus of 3.5%. The pound was quoted at $1.3331 at midday on Wednesday in London, down from $1.3429 at the equities close on Tuesday. The euro stood at $1.1721, down from $1.1775. Against the yen, the dollar was trading at JP¥155.51, higher compared to JP¥154.79. In European equities on Wednesday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was marginally lower. Consumer price inflation in the eurozone was lower than first estimated in November, data published by Eurostat showed. The harmonised consumer price index rose 2.1% in November from a year earlier, matching October’s annual pace but below Eurostat’s preliminary estimate of a rise to 2.2%. The lowest annual CPI inflation rate in the eurozone was recorded in Cyprus at 0.1%, followed by France at 0.8% and Italy at 1.1%. The highest rate was in Estonia at 4.7%, followed by Croatia at 4.3% and Austria at 4.0%. On a monthly basis, consumer prices in the eurozone fell by 0.3% in November, after a 0.2% increase in October. Sentiment among German businesses deteriorated more than anticipated in December, according to data published by the ifo institute. The ifo Business Climate index fell to 87.6 points in December from 88.0 points in November, undershooting the FXStreet-cited consensus of a rise to 88.2. November’s reading was revised down from 88.1. The current assessment index was unchanged at 85.6 but came in slightly below expectations, while the expectations index declined to 89.7 from 90.5, also missing consensus forecasts. Back in London, Phoenix Group led the FTSE 100 higher, up 4.1%, after UBS raised the insurer to ’buy’ from ’neutral’ and lifted its price target to 770p from 670p. Bunzl was the biggest loser on the index, down 3.1%, after reiterating its outlook for 2025. The distribution group said it expects revenue to rise between 2% and 3% at constant exchange rates and to remain broadly flat at actual rates, citing ongoing macroeconomic challenges. On the FTSE 250, Serco rose 5.5% after the government services outsourcing firm upgraded its guidance for underlying operating profit this year, citing growth in the defence sector, and announced a new chief financial officer starting in March. Serco now expects underlying operating profit of around £270 million for 2025, up from prior guidance of £260 million but slightly below £274 million in 2024. Revenue guidance was maintained at £4.9 billion. The company also issued initial guidance for 2026, forecasting underlying operating profit of £300 million on revenue of £5.0 billion. Greencore rose 2.4% and Bakkavor gained 1.5% after Greencore said its £1.2 billion acquisition of Bakkavor will complete in January, following competition clearance. The deal had faced scrutiny from the UK Competition & Markets Authority, which approved the transaction after Greencore agreed to divest its Bristol chilled soups and sauces facility. Elsewhere, Synectics fell 18%, despite reporting solid demand and good visibility on its new business pipeline. The company said its order book stood at £26.5 million at November 30, down from £38.5 million a year earlier, while it expects adjusted pretax profit of at least £6.0 million for the year, up from £4.7 million, on revenue of around £68 million. Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.4%. The yield on the US 10-year Treasury was quoted at 4.17%, unchanged from Tuesday. The yield on the US 30-year Treasury was quoted at 4.85%, widening from 4.83%. Brent oil was quoted at $60.18 a barrel at midday in London on Wednesday, up from $59.01 late Tuesday, , after President Trump ordered a blockade of ‘sanctioned’ oil tankers travelling to and from Venezuela. The move escalates pressure on Caracas as the US builds a larger military presence in the Caribbean. The country is estimated to have oil reserves of some 303 billion barrels, according to the Organisation of the Petroleum Exporting Countries, OPEC, more than any other nation. Gold was quoted at $4,318.40 an ounce, up from $4,304.60 late on Tuesday. Still to come on Wednesday’s economic calendar are US Energy Information Administration crude oil stock figures. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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