London pre-open: Stocks to fall as investors mull inflation data

The FTSE 100 was called to open 10 points lower at 7,841.

Figures released earlier by the Office for National Statistics showed that consumer price inflation eased to 10.5% in December from 10.7% the month before, but remains close to a 40-year high and well above the Bank of England's 2% target. Economists had been expecting the inflation rate to be unchanged.

The main reason behind the decline was a drop in petrol and clothing prices.

Meanwhile, the core rate of inflation was flat at 6.3%, versus consensus expectations of 6.2%.

Capital Economics said the small fall in CPI inflation and unchanged core rate "suggests it is too early for the Bank of England to declare victory in its fight against inflation".

"This supports our view that the Bank will raise Bank Rate from 3.50% now to a peak of 4.50% in the coming months."

In corporate news, housebuilder Vistry said it was on track to deliver annual profits in line with expectations, despite a challenging market after last September’s disastrous government mini-budget that sent markets into freefall.

In a trading update Vistry said it had started the new year with forward sales of £4.6bn, up from £2.7bn in 2021 when sites had been closed due to the Covid pandemic.

Updates were also out from Pearson, Antofagasta, Smiths Group and WH Smith, among others.