London open: Stocks tread water as investors mull inflation data

At 0830 BST, the FTSE 100 was down 0.1% at 7,212.96, while sterling was 0.1% weaker against the dollar at 1.3784.

Data released earlier by the Office for National Statistics showed consumer price inflation unexpectedly dipped in September despite the rising cost of fuel and transport.

CPI fell to 3.1% from 3.2% in August, versus expectations for it to remain unchanged. Still, it remains well above the Bank of England’s target of 2%, meaning it’s unlikely to do anything to reduce expectations the Bank will raise interest rates before the end of the year.

The decline was due mainly to the impact of last summer’s ‘Eat Out to Help Out’ scheme. The biggest downward contribution came from restaurants/cafes inflation, which fell to 3.9% in September from 7.9% the month before.

Core inflation, which strips out volatile elements such as food and fuel, slipped to 2.9% from 3.1%.

ONS Head of Prices Mike Hardie said: "Annual inflation fell back a little in September due to the unwinding effect of last year's 'Eat Out to Help Out,' which was a factor in pushing up the rate in August.

"However, this was partially offset by most other categories, including price rises for furniture and household goods and food prices falling more slowly than this time last year.

"The costs of goods produced by factories rose again, with metals and machinery showing a notable price rise.

"Road freight costs for UK businesses also continued to rise across the summer."

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said inflation is expected to reach 4%, double the BoE’s target by the end of the year, and potentially 5% by next April.

"With prices staying stubbornly high and another surge expected, a gentle rise in interest rates before the end of the year still looks likely if there is any chance of keeping a Goldilocks economy within reach.

"Too much inflation in the mix risks the economy getting too hot, leading prices to spiral upwards. If rates are pushed up rapidly, there’s a risk it gets too cold, freezing off economic growth. A 2% inflation target is considered just right, as long as the economy also keeps growing."

In equity markets, miners were under the cosh as metals prices fell, with Antofagasta, Rio Tinto, BHP, Anglo American and Glencore all lower.

Online review website Trustpilot tumbled after shareholders placed around 41m shares, or a 10% stake, in the company. According to Bloomberg, holders Draper Esprit, Index Ventures, Northzone, Seed Capital, Sunley House Capital Management and Vitruvian Partners placed the shares.

Hammerson was also in the red even as the property group reported a "significant" improvement in rent collection for the fourth quarter.

On the upside, Crest Nicholson gained as the housebuilder outlined its growth strategy.

Market Movers

FTSE 100 (UKX) 7,212.96 -0.06%
FTSE 250 (MCX) 23,050.13 -0.02%
techMARK (TASX) 4,557.38 0.13%

FTSE 100 - Risers

SSE (SSE) 1,614.50p 1.67%
Burberry Group (BRBY) 1,854.50p 1.34%
Reckitt Benckiser Group (RKT) 5,446.00p 1.02%
Entain (ENT) 2,192.00p 0.97%
Taylor Wimpey (TW.) 158.10p 0.96%
Halma (HLMA) 2,890.00p 0.91%
BAE Systems (BA.) 597.00p 0.74%
Ocado Group (OCDO) 1,815.00p 0.69%
Avast (AVST) 565.20p 0.68%
Unilever (ULVR) 3,812.00p 0.66%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,403.50p -4.91%
Rio Tinto (RIO) 4,909.00p -2.79%
International Consolidated Airlines Group SA (CDI) (IAG) 162.60p -1.79%
BHP Group (BHP) 1,972.80p -1.78%
Anglo American (AAL) 2,797.00p -1.50%
Land Securities Group (LAND) 689.20p -1.35%
Glencore (GLEN) 375.60p -1.34%
Pearson (PSON) 622.80p -1.27%
InterContinental Hotels Group (IHG) 5,006.00p -1.03%
JD Sports Fashion (JD.) 1,043.50p -1.00%

FTSE 250 - Risers

Network International Holdings (NETW) 359.80p 4.29%
IP Group (IPO) 127.60p 3.24%
Weir Group (WEIR) 1,691.50p 2.21%
Crest Nicholson Holdings (CRST) 380.80p 2.15%
Centrica (CNA) 59.72p 2.09%
Edinburgh Worldwide Inv Trust (EWI) 312.00p 1.96%
Wood Group (John) (WG.) 232.00p 1.93%
RHI Magnesita N.V. (DI) (RHIM) 3,236.00p 1.76%
Moneysupermarket.com Group (MONY) 224.20p 1.45%
Spire Healthcare Group (SPI) 237.50p 1.28%

FTSE 250 - Fallers

Trustpilot Group (TRST) 337.60p -10.83%
TUI AG Reg Shs (DI) (TUI) 236.10p -3.12%
Hammerson (HMSO) 32.35p -3.09%
Cineworld Group (CINE) 63.00p -2.69%
888 Holdings (888) 400.00p -1.82%
Carnival (CCL) 1,470.40p -1.65%
FDM Group (Holdings) (FDM) 1,236.00p -1.44%
Baillie Gifford Japan Trust (BGFD) 979.00p -1.21%
SSP Group (SSPG) 248.80p -1.11%
Discoverie Group (DSCV) 1,078.00p -1.10%