London open: FTSE little changed as inflation hits fresh 40-year high

At 0830 BST, the FTSE 100 was flat at 7,521.37, while sterling was down 0.7% against the dollar at 1.2412.

Figures released earlier by the Office for National Statistics showed the headline consumer price index rose to 9% in April form 7% in March after energy prices surged. This is the highest reading since comparable readings in 1982, although the figure was also marginally below consensus expectations of 9.1%.

Including owner occupiers’ housing costs, the index rose by 7.8% in the 12 months to April, from 6.2% in March.

The largest upward contribution to annual CPIH inflation was housing and household services, which includes electricity, gas and other fuels. In April, the energy bills rose by 54% in response to surging wholesale prices.

Transport costs also weighed heavily, rising 1.47 percentage points as the cost of motor fuels continue to rise.

Paul Dales, chief UK economist at Capital Economics, said things are going to get worse before they get better.

"If the rise in CPI inflation from 7.0% to a 40-year high of 9.0% in April wasn’t bad enough, inflation will probably rise further to 10% in October and will then fall back to the 2% target only slowly," he said. "That’s why we think the Bank of England has more work to do and will raise interest rates from 1.00% now to 3.00%."

In equity markets, Burberry rallied as the luxury retailer posted a rise in 2022 fiscal year profits and revenues but said its full-year outlook hinged on how fast China bounced back from Covid-19 lockdowns.

Reckitt Benckiser was boosted by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets, while WH Smith gained after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.

Molten metal flow engineer Vesuvius pushed higher after saying that its sales performance in the first four months of the year was stronger than expected.

Media publisher Future and Mr Kipling and Oxo owner Premier Foods were both up after well-received results, while housebuilder Vistry advanced after saying 2022 profits were set to be at the top end of market forecasts.

On the downside, Experian fell even as the credit-checking firm posted a jump in full-year profit and revenue and highlighted significant progress in consumer services.

Tui was under the cosh after the travel company placed 162.3m shares at €2.62 each.

Market Movers

FTSE 100 (UKX) 7,521.37 0.04%
FTSE 250 (MCX) 20,122.94 0.29%
techMARK (TASX) 4,338.68 -0.04%

FTSE 100 - Risers

SSE (SSE) 1,929.50p 2.61%
International Consolidated Airlines Group SA (CDI) (IAG) 126.44p 1.71%
Kingfisher (KGF) 262.50p 1.47%
National Grid (NG.) 1,254.00p 1.37%
Burberry Group (BRBY) 1,605.00p 1.36%
Reckitt Benckiser Group (RKT) 6,372.00p 1.30%
3i Group (III) 1,365.00p 1.26%
Aviva (AV.) 410.65p 1.23%
Lloyds Banking Group (LLOY) 44.32p 1.18%
Severn Trent (SVT) 3,160.00p 1.15%

FTSE 100 - Fallers

Experian (EXPN) 2,560.00p -4.08%
Fresnillo (FRES) 767.00p -1.46%
HSBC Holdings (HSBA) 496.70p -1.13%
Rio Tinto (RIO) 5,415.00p -1.01%
Antofagasta (ANTO) 1,432.50p -0.93%
Sage Group (SGE) 662.40p -0.63%
AstraZeneca (AZN) 10,422.00p -0.63%
Admiral Group (ADM) 2,255.00p -0.53%
Glencore (GLEN) 495.65p -0.52%
Vodafone Group (VOD) 119.68p -0.52%

FTSE 250 - Risers

WH Smith (SMWH) 1,566.00p 4.09%
Vesuvius (VSVS) 342.00p 3.39%
TP Icap Group (TCAP) 129.50p 3.27%
Future (FUTR) 2,120.00p 3.21%
Premier Foods (PFD) 110.00p 3.19%
Baltic Classifieds Group (BCG) 141.60p 2.31%
TI Fluid Systems (TIFS) 163.60p 2.25%
Vistry Group (VTY) 821.00p 2.18%
Coats Group (COA) 73.40p 1.80%
easyJet (EZJ) 511.80p 1.71%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 221.30p -10.04%
XP Power Ltd. (DI) (XPP) 3,115.00p -2.50%
Darktrace (DARK) 371.50p -2.49%
Rank Group (RNK) 98.70p -2.08%
Trustpilot Group (TRST) 112.10p -1.84%
Ferrexpo (FXPO) 156.30p -1.45%
Helios Towers (HTWS) 115.80p -1.28%
Quilter (QLT) 126.10p -1.25%
Dr. Martens (DOCS) 205.80p -1.06%
Greencore Group (CDI) (GNC) 109.30p -1.00%