London midday: FTSE stays up ahead of Spring Statement
By Michele Maatouk
Date: Wednesday 26 Mar 2025
(Sharecast News) - London stocks were still a little firmer by midday on Wednesday, while sterling fell as investors mulled a slightly bigger-than-expected drop in UK inflation ahead of the Spring Statement.
The FTSE 100 was up 0.2% at 8,679.42, while sterling was down 0.3% against the dollar at 1.2907.
Figures released earlier by the Office for National Statistics showed that inflation eased a little more than expected in February as clothing prices fell.
Consumer price inflation eased to 2.8% from 3% in January. Economists were expecting a smaller decline to 2.9%.
ONS chief economist Grant Fitzner said: "Clothing prices, particularly for women's clothing, was the biggest driver of this month's fall.
"This was only partially offset by small increases, for example, from alcoholic drinks."
Core CPI - which excludes energy, food, alcohol and tobacco - rose 3.5% in February, down from 3.7% the month before.
The data also showed that services inflation was unchanged at 5%, versus expectations for a fall to 4.9%.
Investors were shifting their attention to Chancellor Rachel Reeves' Spring Statement, which is due after Prime Minister's Questions at noon.
Dan Coatsworth, investment analyst at AJ Bell, said: "The pound weakened in early trading against the US dollar as investors braced themselves for the UK government's Spring Statement.
"The OBR is widely expected to downgrade its economic forecast for the country. What really matters to investors is the extent of that downgrade and the omens look bad.
"It could be a testing day for markets if chancellor Rachel Reeves delivers more bad news and is seen to be fighting a losing battle. However, the flipside of a weaker pound is that it benefits the army of dollar earners on the FTSE 100, hence why the UK index traded higher. Energy producers and miners were among the top risers.
"Lower than expected inflation figures today and strong services PMI data earlier in the week will have been welcomed with open arms by Reeves. Sadly, these two data points are not enough to convince markets that everything is rosy with the UK."
In equity markets, defence firm Babcock nudged higher after saying it has been awarded a five-year contract extension with the Ministry of Defence worth around £1bn.
Ocado surged after an upgrade to 'overweight' from 'neutral' by JPMorgan, which identified "several reasons to be more optimistic". Ocado's JV partner Marks & Spencer was the top gainer on the FTSE 100.
Ithaca Energy was also up after it hailed a "robust" 2024 operational and financial performance at the top end of management guidance.
Bakkavor rallied following a Bloomberg report that convenience food maker Greencore has lifted its bid for the rival.
Housebuilder Vistry tumbled as it reported a slump in profits after a "disappointing" year amid challenging market conditions, abandoned projects and cost overruns that forced it to suspend its dividend.
Wetherspoons was hit by a downgrade to 'sell' by Deutsche Bank.
Market Movers
FTSE 100 (UKX) 8,679.42 0.18%
FTSE 250 (MCX) 20,089.66 0.54%
techMARK (TASX) 4,670.53 -0.22%
FTSE 100 - Risers
Marks & Spencer Group (MKS) 341.00p 2.56%
Hiscox Limited (DI) (HSX) 1,195.00p 2.05%
Rentokil Initial (RTO) 355.70p 1.86%
Shell (SHEL) 2,815.00p 1.81%
Next (NXT) 9,966.00p 1.74%
Severn Trent (SVT) 2,459.00p 1.19%
Beazley (BEZ) 896.00p 1.19%
Prudential (PRU) 836.80p 1.19%
Airtel Africa (AAF) 165.50p 0.98%
International Consolidated Airlines Group SA (CDI) (IAG) 299.40p 0.94%
FTSE 100 - Fallers
Admiral Group (ADM) 2,824.00p -2.35%
Smiths Group (SMIN) 1,991.00p -1.44%
Schroders (SDR) 377.60p -1.20%
Standard Chartered (STAN) 1,185.00p -1.09%
GSK (GSK) 1,470.00p -1.08%
Auto Trader Group (AUTO) 749.00p -0.98%
AstraZeneca (AZN) 11,212.00p -0.92%
Antofagasta (ANTO) 1,908.50p -0.91%
Games Workshop Group (GAW) 14,240.00p -0.84%
Experian (EXPN) 3,599.00p -0.66%
FTSE 250 - Risers
Ocado Group (OCDO) 290.50p 16.29%
Ithaca Energy (ITH) 153.60p 8.02%
Raspberry PI Holdings (RPI) 514.25p 6.34%
Trustpilot Group (TRST) 245.00p 4.93%
Oxford Nanopore Technologies (ONT) 105.90p 4.13%
The Renewables Infrastructure Group Limited (TRIG) 75.00p 3.73%
Bakkavor Group (BAKK) 174.00p 3.26%
Ferrexpo (FXPO) 63.80p 3.24%
Syncona Limited NPV (SYNC) 89.50p 2.87%
FirstGroup (FGP) 168.10p 2.63%
FTSE 250 - Fallers
Vistry Group (VTY) 616.50p -4.93%
Burberry Group (BRBY) 792.00p -2.58%
Future (FUTR) 820.50p -2.50%
Bellway (BWY) 2,400.00p -1.80%
Volution Group (FAN) 555.00p -1.60%
Computacenter (CCC) 2,542.00p -1.32%
Wetherspoon (J.D.) (JDW) 563.00p -1.23%
OSB Group (OSB) 455.20p -1.00%
Bloomsbury Publishing (BMY) 612.00p -0.97%
Baltic Classifieds Group (BCG) 324.50p -0.92%
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