London open: Stocks edge up as investors mull inflation data

London stocks edged up in early trade on Wednesday as investors mulled the latest UK inflation data.

At 0825 BST, the FTSE 100 was 0.2% higher at 7,195.59.

Figures released earlier by the Office for National Statistics showed that inflation fell more than expected in July, easing pressure on the Bank of England.

Consumer price inflation declined to 2% from 2.5% in June, coming in in line with the BoE’s 2% target and below consensus expectations of 2.3%. This marked the first easing inflation since February.

Core inflation - which strips out food and energy - fell to 1.8% from 2.3%, coming in below consensus expectations of 2.0%.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "Inflation fell back in July across a broad range of goods and services, including clothing, which decreased with summer sales returning after the pandemic hit the sector last year. This was offset by a sharp rise in the price of second-hand cars amidst increased demand, following a shortage of new models.

"The differing patterns of movement restrictions across the last two years have affected headline inflation. Some of this month’s fall came from products and services, such as foreign travel, where real prices were used last year but have had to be imputed this year."

Ruth Gregory, senior UK economist at Capital Economics, said: "July’s drop in CPI inflation is likely to be followed by sharp rises in the next few months, taking inflation to a peak of about 4.5%.

"But provided higher inflation does not feed through into higher inflation expectations or persistently faster pay growth, we do not think that the Bank of England will respond next year by tightening monetary policy."

In equity markets, silver and gold miner Hochschild rose after reporting a jump in first-half profit and revenue as total group production was significantly higher versus the Covid-19 impacted first half of 2020.

On the downside, housebuilder Persimmon fell even as it said interim profits surged on the back of increased demand and government support measures as Covid curbs were eased. Pre-tax profit for the six months to June 30 rose to £480.1m from £292.4m on revenue of £1.84bn compared with £1.19bn a year earlier.

Payments company Network International was in the red despite saying it swung to an interim profit and backing its full-year profit expectations.

Balfour Beatty lost ground even as the infrastructure group swung to profit and reinstated its dividend as it announced a withdrawal from fixed-price residential projects in London.

Market Movers

FTSE 100 (UKX) 7,195.59 0.20%
FTSE 250 (MCX) 23,747.89 0.23%
techMARK (TASX) 4,816.14 0.30%

FTSE 100 - Risers

Just Eat Takeaway.Com N.V. (CDI) (JET) 6,447.00p 2.17%
Ocado Group (OCDO) 1,872.00p 1.46%
Smith & Nephew (SN.) 1,403.50p 1.08%
Compass Group (CPG) 1,502.00p 1.08%
Aveva Group (AVV) 4,088.00p 0.94%
Antofagasta (ANTO) 1,527.00p 0.93%
Barratt Developments (BDEV) 712.00p 0.91%
ITV (ITV) 119.40p 0.89%
AstraZeneca (AZN) 8,661.00p 0.89%
International Consolidated Airlines Group SA (CDI) (IAG) 160.62p 0.88%

FTSE 100 - Fallers

Royal Dutch Shell 'B' (RDSB) 1,426.20p -0.68%
Royal Dutch Shell 'A' (RDSA) 1,437.80p -0.68%
Abrdn (ABDN) 273.10p -0.51%
Prudential (PRU) 1,464.50p -0.48%
Avast (AVST) 598.20p -0.47%
BHP Group (BHP) 2,347.50p -0.45%
Johnson Matthey (JMAT) 2,939.00p -0.44%
BP (BP.) 301.15p -0.43%
Admiral Group (ADM) 3,632.00p -0.41%
Smiths Group (SMIN) 1,437.50p -0.38%

FTSE 250 - Risers

Future (FUTR) 3,828.00p 3.46%
AO World (AO.) 228.00p 2.61%
Ferrexpo (FXPO) 399.00p 2.52%
C&C Group (CDI) (CCR) 261.20p 2.43%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,447.00p 2.17%
Hochschild Mining (HOC) 154.60p 2.05%
Hammerson (HMSO) 34.42p 1.59%
SSP Group (SSPG) 257.90p 1.50%
Micro Focus International (MCRO) 420.80p 1.45%
Watches of Switzerland Group (WOSG) 1,028.00p 1.38%

FTSE 250 - Fallers

Balfour Beatty (BBY) 308.40p -3.32%
Rank Group (RNK) 176.20p -2.11%
PureTech Health (PRTC) 332.00p -1.34%
Crest Nicholson Holdings (CRST) 400.60p -1.09%
Plus500 Ltd (DI) (PLUS) 1,489.50p -0.87%
Mediclinic International (MDC) 288.80p -0.76%
Morgan Advanced Materials (MGAM) 397.00p -0.75%
Wood Group (John) (WG.) 232.90p -0.68%
Wizz Air Holdings (WIZZ) 4,891.00p -0.61%
European Opportunities Trust (JEO) 837.00p -0.59%