London pre-open: Stocks seen lower; inflation in focus
London stocks were set to fall at the open on Wednesday as the latest figures from the Office for National Statistics showed that inflation declined less than expected in April.
The FTSE 100 was called to open down around 30 points.
ONS data released earlier showed that consumer price inflation fell to 2.3% in April from 3.2% the month before, hitting its lowest level since July 2021 and edging closer to the Bank of England’s 2% target. However, it was above the 2.1% expected.
Meanwhile, core inflation - which excludes energy and food prices - fell to 3.9% from 4.2%, but was above the 3.6% forecast.
ONS chief economist Grant Fitzner said: "There was another large fall in annual inflation led by lower electricity and gas prices, due to the reduction in the Ofgem energy price cap.
"Tobacco prices also helped pull down the rate, with no duty changes announced in the Budget.
"Meanwhile food price inflation saw further falls over the year.
"These falls were partially offset by a small uptick in petrol prices."
In corporate news, RS Group said it saw annual profits drop by a quarter, which the industrial and electrical products provider blamed on weakness in global industrial production and the unwinding of unusual post-pandemic trading tailwinds.
Adjusted operating profit slumped by 25% on a like-for-like basis to £312m in the 12 months to 31 March, as LFL revenues fell 8% to £2.94bn and the adjusted operating profit margin fell to 10.6% from 13.5%.
Looking ahead, the company said that demand was stabilising but remains subdued, with limited short-term visibility - though indicators suggest some market improvement in the second half of 2024/25.
SSE reported adjusted earnings per share of 158.5p in its preliminary results, reflecting a strong operational performance, and reported earnings per share of 156.7p, impacted by impairments and fair value movements on derivatives.
Increased profits in SSEN Transmission were driven by higher investment, while profitability in Renewables rose due to higher hedged prices and Seagreen offshore wind farm reaching full power.
The company issued £1.1bn of long-term debt, with adjusted net debt and hybrid capital at £9.4bn, maintaining a net debt to EBITDA ratio of 3x, within a strong investment-grade credit rating.