London midday: Stocks fall after higher-than-expected inflation print
By Michele Maatouk
Date: Wednesday 19 Feb 2025
(Sharecast News) - London stocks had fallen further by midday on Wednesday as investors mulled a higher-than-expected UK inflation print.
The FTSE 100 was down 0.5% at 8,727.04.
Data released earlier by the Office for National Statistics showed the annual rate of consumer price inflation rose to 3% in January from 2.5% the month before, versus expectations for a smaller uptick to 2.8%.
On a monthly basis, CPI fell 0.1% last month, compared with a 0.6% fall in January 2024.
The ONS said the largest upward contribution to the monthly and annual changes came from transport, and food and non-alcoholic beverages, while the largest downward contribution came from housing and household services.
Core CPI - which excludes energy, food, alcohol and tobacco - was 3.7%, up from 3.2% in December. Meanwhile, services inflation ticked up to 5% from 4.4%.
The figures also revealed a rise in private school fees, where prices rose by 12.7% on the month after the government imposed 20% VAT on school fees.
ONS chief economist Grant Fitzner said: "Inflation increased sharply this month to its highest annual rate since March last year.
"The rise was driven by air fares not falling as much as we usually see at this time of year, partly impacted by the timing of flights over Christmas and New Year. This was the weakest January dip since 2020.
"After falling this time last year, the cost of food and non-alcoholic drinks increased, particularly meat, bread and cereals.
"Private school fees were another factor, as new VAT rules meant prices rose nearly 13% this month."
Ruth Gregory, deputy chief UK economist at Capital Economics, said the climb in inflation will be "uncomfortable" for the Bank of England.
"We doubt this will prevent the Bank of England from cutting interest rates further. But it will mean it continues to cut rates only slowly," she said.
In equity markets, Glencore lost ground as the miner reported a fall in annual core earnings due to weaker commodities prices but said it would still return $2.2bn to shareholders via dividends and a buyback. The company's chief executive also said it was considering ditching its primary listing in the UK in favour of New York or another location where it can "get the right valuation".
HSBC nudged lower even as it posted a rise in annual profits and announced a $2bn share buyback.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "There was a slight disappointment in impairments, which are higher than expected, signalling a potential shift from HSBC's historically market-leading credit quality - a trend worth keeping an eye on.
"Guidance for the new year is ahead of expectations, but much of the positive outlook was already priced in given the improved US rate environment and expected cost management efforts."
Airlines flew lower, with easyJet, IAG and Wizz Air all down after Jet2 warned profit margins in the year ahead would "come under some pressure" due to cost increases.
Trainline tumbled after a downgrade to 'neutral' at JPMorgan, while Wood Group slid after a downgrade to 'reduce' at Kepler Cheuvreux.
On the upside, Antofagasta rallied after a double upgrade to 'overweight' at JPMorgan Cazenove, which cited a positive long-term copper outlook and leading medium-term copper growth.
BAE Systems reversed earlier losses to trade up, as it posted a rise in full-year profit and a record order backlog.
BP gained following a report it is considering a potential sale of its lubricants business. Bloomberg cited people familiar with the matter as saying that the oil major's unit - which operates under the Castrol brand - could be worth about $10bn in a deal.
Market Movers
FTSE 100 (UKX) 8,727.04 -0.45%
FTSE 250 (MCX) 20,734.16 -0.71%
techMARK (TASX) 4,779.65 -0.25%
FTSE 100 - Risers
Antofagasta (ANTO) 1,908.25p 3.99%
BAE Systems (BA.) 1,352.00p 1.16%
Pershing Square Holdings Ltd NPV (PSH) 4,534.00p 1.02%
SSE (SSE) 1,476.50p 0.89%
BP (BP.) 464.65p 0.49%
Marks & Spencer Group (MKS) 348.60p 0.46%
Pearson (PSON) 1,354.00p 0.45%
National Grid (NG.) 947.60p 0.42%
Shell (SHEL) 2,690.00p 0.37%
Unilever (ULVR) 4,355.00p 0.35%
FTSE 100 - Fallers
Glencore (GLEN) 328.10p -7.20%
easyJet (EZJ) 496.10p -4.15%
Hiscox Limited (DI) (HSX) 1,034.00p -3.09%
Barratt Redrow (BTRW) 426.40p -2.96%
Kingfisher (KGF) 244.10p -2.55%
Beazley (BEZ) 816.00p -2.51%
Persimmon (PSN) 1,201.00p -2.28%
Taylor Wimpey (TW.) 112.40p -2.26%
JD Sports Fashion (JD.) 82.10p -2.24%
Spirax Group (SPX) 7,660.00p -2.23%
FTSE 250 - Risers
Chemring Group (CHG) 367.50p 1.94%
Harworth Group (HWG) 165.50p 1.85%
Mony Group (MONY) 203.40p 1.70%
Future (FUTR) 1,020.00p 1.39%
NB Private Equity Partners Ltd. (NBPE) 1,602.00p 1.26%
Ithaca Energy (ITH) 131.40p 1.23%
PayPoint (PAY) 659.00p 0.92%
Pacific Horizon Inv Trust (PHI) 595.00p 0.85%
Pollen Street Group Limited (POLN) 778.00p 0.78%
Fidelity China Special Situations (FCSS) 261.50p 0.77%
FTSE 250 - Fallers
Wood Group (John) (WG.) 26.32p -9.55%
Trainline (TRN) 316.40p -8.55%
Ferrexpo (FXPO) 97.90p -3.83%
Wizz Air Holdings (WIZZ) 1,565.00p -3.69%
Foresight Group Holdings Limited NPV (FSG) 391.00p -3.22%
Burberry Group (BRBY) 1,111.50p -3.01%
Domino's Pizza Group (DOM) 290.80p -2.87%
Lancashire Holdings Limited (LRE) 581.00p -2.35%
Tate & Lyle (TATE) 541.00p -2.26%
Carnival (CCL) 1,807.00p -2.19%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN