London open: Stocks steady as inflation hits fresh 30-year high

London stocks were steady in early trade on Wednesday as data showed that UK inflation hit a fresh 30-year high in March.

At 0840 BST, the FTSE 100 was flat at 7,576.00.

Figures released earlier by the Office for National Statistics showed that consumer price inflation rose to 7% in March as energy and food prices surged. This was its sharpest jump since 1992, up from 6.2% in February and above analysts’ expectations of 6.7%.

Motor fuel inflation increased to 30.7% from 22.3% in February, while food inflation rose to 5.9% from 5.1%.

The increase in inflation does not take into account the average 54% rise in energy bills that came into effect on 1 April. This will not figure in the data until next month.

Core CPI, which excludes food, energy, alcohol and tobacco, rose to 5.7% in March from 5.2% the month before and was above consensus expectations of 5.4%.

ONS chief economist Grant Fitzner said: "Broad-based price rises saw annual inflation increase sharply again in March. Amongst the largest increases were petrol costs, with prices mostly collected before the recent cut in fuel duty, and furniture.

"Restaurants and hotel prices also rose steeply in March while, after falling a year ago, there were rises across a number of different types of food.

"The price of goods leaving UK factories has continued to rise substantially with metal and transport products both at record highs and food reaching its highest rate for over a decade.

"Raw material costs also rose, with a notable increase in the price of crude oil."

Last month, the Office for Budget Responsibility said it expected consumer price inflation to peak at a 40-year high of 8.7% in the fourth quarter of 2022.

Ruth Gregory, senior UK economist at Capital Economics, said: "It’s no secret that inflation is going to rise even further in April, with the 54% leap in utility prices set to add a whopping 1.6ppts to inflation. We think the result will be a rise in CPI inflation to around 8.5% in April. And while we suspect April could mark the peak, we think inflation will remain above 7.0% for most of 2022 and above 3.0% for most of 2023.

"With high inflation feeding into price/wage decisions, we think the Bank of England will have to raise rates further than it expects, perhaps to at least 2.00% next year."

In equity markets, Oxford Instruments rallied after saying it now expects full-year revenues and adjusted operating profit to be "marginally ahead" of internal expectations, despite supply chain disruption and cost inflation.

Cybersecurity firm Darktrace gained as it increased its annual revenue guidance after adding 359 net new customers in the third quarter.

On the downside, Tesco was under the cosh as it reported a surge in annual profits thanks to higher sales and lower costs related to the Covid pandemic, but struck a cautious note on the outlook.

Ocado and Sainsburys were also in the red, while Hammerson was knocked lower by a downgrade to ‘underweight’ at JPMorgan.

Market Movers

FTSE 100 (UKX) 7,576.00 -0.01%
FTSE 250 (MCX) 20,923.24 -0.41%
techMARK (TASX) 4,405.18 0.00%

FTSE 100 - Risers

Airtel Africa (AAF) 150.10p 1.56%
Antofagasta (ANTO) 1,698.50p 1.19%
Intermediate Capital Group (ICP) 1,682.50p 1.11%
AstraZeneca (AZN) 10,614.00p 1.05%
Glencore (GLEN) 529.90p 0.97%
Hikma Pharmaceuticals (HIK) 2,082.00p 0.77%
Dechra Pharmaceuticals (DPH) 4,102.00p 0.74%
Shell (SHEL) 2,179.25p 0.63%
Anglo American (AAL) 4,126.00p 0.62%
WPP (WPP) 977.60p 0.60%

FTSE 100 - Fallers

Tesco (TSCO) 259.10p -4.25%
Ocado Group (OCDO) 1,145.00p -3.33%
Sainsbury (J) (SBRY) 237.80p -2.78%
JD Sports Fashion (JD.) 143.95p -2.34%
Land Securities Group (LAND) 736.60p -1.79%
Next (NXT) 6,038.00p -1.66%
B&M European Value Retail S.A. (DI) (BME) 541.20p -1.56%
Rolls-Royce Holdings (RR.) 88.58p -1.35%
CRH (CDI) (CRH) 2,964.50p -1.33%
Kingfisher (KGF) 257.40p -1.27%

FTSE 250 - Risers

Oxford Instruments (OXIG) 2,170.00p 4.58%
Darktrace (DARK) 469.80p 3.82%
Baillie Gifford Japan Trust (BGFD) 782.00p 1.82%
Great Portland Estates (GPE) 714.50p 1.64%
Future (FUTR) 2,398.00p 1.61%
Diploma (DPLM) 2,834.00p 1.21%
Drax Group (DRX) 792.50p 1.21%
Clarkson (CKN) 3,520.00p 1.00%
Derwent London (DLN) 3,150.00p 0.96%
Plus500 Ltd (DI) (PLUS) 1,585.00p 0.96%

FTSE 250 - Fallers

Polymetal International (POLY) 250.00p -5.84%
Hammerson (HMSO) 30.57p -5.09%
Trustpilot Group (TRST) 148.40p -3.07%
Marks & Spencer Group (MKS) 148.90p -2.90%
Countryside Partnerships (CSP) 248.80p -2.58%
Currys (CURY) 93.75p -2.55%
Dunelm Group (DNLM) 1,039.00p -2.53%
Renishaw (RSW) 3,754.00p -2.39%
WH Smith (SMWH) 1,405.50p -2.19%
Moonpig Group (MOON) 218.00p -2.15%