London pre-open: Stocks seen flat after UK inflation, ahead of Fed

London stocks were set for a flat open on Wednesday as investors digested the latest UK inflation data and looked ahead to a policy announcement by the US Federal Reserve.

The FTSE 100 was called to open just four points higher at 7,222.

Figures released earlier by the Office for National Statistics showed that inflation hit its highest level in November in more than 10 years. Consumer price inflation rose to 5.1% form 4.2% in October, coming in at more than twice the Bank of England’s 2% target and above expectations of 4.7%.

Grant Fitzner, chief ONS economist, said: "A wide range of price rises contributed to another steep rise in inflation, which now stands at its highest rate for over a decade."

Looking ahead to the rest of the day, investors will be eyeing a policy announcement from the Fed after the London close.

CMC Markets analyst Michael Hewson said: "Yesterday’s record-breaking US PPI print has neatly set the scene for today’s Federal Reserve rate decision, which is expected to see the FOMC take the decision to accelerate the pace of the tapering program which started last month."

In corporate news, online gambling group 888 Holdings said it had sold its B2C and B2B bingo businesses to the Broadway Gaming group for $50m on a cash-free debt-free basis, including a potential earnout of up to $4m.

Cinema operator Cineworld has been ordered to pay Canadian theatre company Cineplex CAD $1.28bn (£751.57m) in damages and lost transaction costs in relation to its proposed acquisition of the Toronto-based firm.

The Ontario Superior Court of Justice ruled that Cineworld had breached its obligations by terminating the arrangement agreement and granted Cineplex's claim, dismissing Cineworld's counter-claim and awarding the former damages of CAD $1.23bn (£722.25m) for lost synergies and CAD $5.5m (£3.22m) for lost transaction costs. Cineworld stated it disagrees with the judgment and will appeal the decision.