London pre-open: Stocks seen lower as investors mull inflation data

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

The FTSE 100 was called to open 54 points lower at 6,980.

Figures released earlier by the Office for National Statistics showed that inflation rose to 1.5% in April from 0.7% in March, in line with expectations. Core inflation increased to 1.3% from 1.1%, also in line with consensus expectations.

ONS chief economist Grant Fitzner said: "Inflation rose in April, mainly due to prices rising this year compared with the falls seen at the start of the pandemic this time last year. This was seen most clearly in household utility bills and clothing prices.

"As the price of crude oil continues to rise, this has fed through to the cost of motor fuels, which are now at their highest since January 2020."

Capital Economics said: "Admittedly, inflation looks set to rise above the Bank’s 2% target later this year for the first time since July 2019. But we doubt it will stay there long, as energy-related effects go into reverse next year, ‘reopening’ inflation eases and the stronger pound to pushes down on inflation.

"While upside risks remain, we suspect that it will only be in 2023 that the effects of a strong economic recovery will have a more sustained influence on inflation. As such, we think the MPC won’t start tightening policy until 2024, much later than the markets expect."

In corporate news, British infrastructure group John Laing has agreed to a £2bn takeover by US buyout firm KKR.

The two firms said KKR would pay 403p a share for Laing, a hefty premium to Tuesday’s closing price of 360p, and the UK company’s board planned to recommend the deal to shareholders.

John Laing invests in transport, social and environmental public-private partnership programmes worldwide. It has also invested in the rollout of high-speed fibres in Germany with two small takeovers of regional telecoms businesses.

Experian said it made a strong start to the current financial year as the company reported a 14% increase in annual profit and fourth-quarter revenue growth at the top of guidance.

Pre-tax profit rose to $1.08bn (£0.76bn) from $942m in the year to the end of March as statutory revenue increased 4% to $5.37bn. Organic revenue growth was 5% in the final quarter of the year. Experian said it made a strong start to the current year and expected organic revenue growth of 15-20% in the first quarter. The company held its annual dividend at 47 cents a share.