London pre-open: Stocks seen down as UK inflation ticks higher

London stocks were set to fall at the open on Wednesday following downbeat sessions in the US and Asia, as investors mulled the latest UK inflation figures.

The FTSE 100 was called to open 53 points lower at 7,505.

CMC Markets analyst Michael Hewson said: "The weak finish in the US looks set to see European markets open lower in the wake of a softer Asia session after China Q4 GDP came in slightly short of expectations at 1%.

"The other metrics for industrial production were slightly better for December, rising 6.8% while retail sales slowed from 10.1% to 7.4%, falling short of forecasts of 8%."

On home shores, data released earlier by the Office for National Statistics showed that consumer price inflation unexpectedly rose in the year to December.

The consumer price index ticked up to 4% from 3.9% in November, versus expectations for a drop to 3.8%. This was driven by a rise in alcohol and tobacco prices and marked the first jump in inflation since February 2023.

In corporate news, BP named its former chief financial officer Murray Auchincloss as its permanent chief executive, after having served in an interim capacity for the past four months.

Auchincloss, who has been part of BP since its merger with Amoco in 1998, had been CFO since July 2020 until September 2023 when he took over the helm following the abrupt departure of former CEO Bernard Looney, who resigned after failing to disclose personal relationships with colleagues.

BP announced that, after a long search for internal and external successors to Looney, Auchincloss has been appointed as ongoing CEO with immediate effect.

Pearson reported a strong 2023 financial performance in an update, with a 5% increase in underlying group sales.

The company’s adjusted operating profit was £570m to £575m, a more than 30% increase compared to 2022, resulting in a margin of around 15.5%. It attributed the success to a strong performance in assessment and qualifications, English language learning, cost efficiency measures, and the expansion of generative AI study tools, along with Pearson+ surpassing one million paid subscriptions in the calendar year.

Building products supplier Ibstock said it was confident in its medium-term prospects, despite subdued residential construction markets, as fourth-quarter trading was in line with expectations.

Full-year revenues are expected to have fallen by 21% to around £405m, with adjusted core earnings in line with guidance.

"Trading in the final quarter in line with our expectations, underpinned by cost reduction action and stable pricing, with market conditions remaining subdued,” Ibstock said in a trading statement.

“Against this backdrop, while the pace of cost inflation has continued to moderate, it remains a feature, with some modest year-on-year inflation expected to be largely covered by pricing action.”