London midday: Stocks nudge lower as investors mull inflation data
By Michele Maatouk
Date: Wednesday 21 May 2025
(Sharecast News) - London stocks had nudged into the red by midday on Wednesday following the release of higher-than-expected UK inflation data and amid tensions in the Middle East.
The FTSE 100 was down 0.1% at 8,769.14.
Figures released earlier by the Office for National Statistics showed that consumer price inflation rose to 3.5% in April from 2.6% in March as household bills increased, hitting its highest level since January 2024. Economists were expecting a jump to 3.3%.
ONS director general Grant Fitzner said: "Significant increases in household bills caused inflation to climb steeply.
"Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap.
"Water and sewerage bills also rose strongly this year, as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year."
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The FTSE 100 has struggled to cling onto gains as investors get to grips with hotter-than expected Uk inflation figures and rising geo-political risks. Sterling has risen amid expectations that the hotter inflation number will make policymakers that bit more inclined to keep interest rates higher for longer. Financial markets have reduced expectations for rate cuts this year, with only one reduction looking bolted on. As the pound flexes more muscle it adversely affects the value of multinationals overseas earnings, which is putting pressure on the FTSE 100.
"April was awful in terms of price rises for consumers. With many bills increases already flagged, inflation was always set to rise sharply, but the jump was even bigger than expected. While rises in gas, electricity, water, transport, and mobile phone calls were forecast, consumer also had to pay higher prices if they splashed out on enjoying themselves, with leisure and recreation costs also rising. But it's been tough for retailers, who haven't been able to pass on higher costs to customers. Instead, the price of furniture and clothing has fallen. Consumers are keener to spend money on enjoying themselves rather than buying more stuff and seem more inclined to swallow higher prices if they are being entertained.
"An escalation of conflict in the Middle East is back at on the worry lists following reports that Israel could be planning to hit Iranian nuclear sites. The situation in Ukraine is also a fresh cause for concern, as although Trump as said negotiations for a truce will start soon, the US administration appears to be retreating from a role as broker in attempting to end the conflict."
In equity markets, Babcock gained after JPMorgan lifted its price target on the stock to 1,100p from 1,000p as it said the next five years are looking "very exciting".
Intermediate Capital rallied as it reported a "milestone" financial year, with assets under management up 14% at $112.4bn.
SSE and Severn Trent both advanced after full-year results.
Marks & Spencer reversed earlier losses to trade up after saying it expects current-year profits to take a £300m hit from a "highly sophisticated" cyber incident that has hampered operations over the past month.
The news came alongside the retailer's full-year results, which revealed a 24% drop in statutory pre-tax profits to £511.8m, mainly due to a £248.5m impairment charge against its investment in Ocado Retail.
Electricals retailer Currys ticked higher after saying it expects annual profit to slightly beat expectations with "significant" free cash flow underpinning the board's plan to resume dividend payments.
On the downside, JD Sports slumped as it warned that US demand could be hit with, customers facing higher prices due to US President Donald Trump's tariff polices and revealed a 2% fall in underlying sales amid a "volatile" market.
Close Brothers fell sharply after saying its loan book shrank in the third quarter, although it remained confident for the full year after it bolstered its capital position.
Market Movers
FTSE 100 (UKX) 8,769.14 -0.14%
FTSE 250 (MCX) 20,918.12 -0.85%
techMARK (TASX) 4,775.45 -0.04%
FTSE 100 - Risers
Fresnillo (FRES) 1,082.00p 3.94%
Babcock International Group (BAB) 885.00p 2.91%
Severn Trent (SVT) 2,784.00p 2.62%
Intermediate Capital Group (ICG) 2,100.00p 2.24%
BAE Systems (BA.) 1,829.00p 1.81%
Phoenix Group Holdings (PHNX) 632.00p 1.69%
United Utilities Group (UU.) 1,149.50p 1.55%
National Grid (NG.) 1,102.00p 1.33%
Marks & Spencer Group (MKS) 371.60p 1.09%
Rolls-Royce Holdings (RR.) 826.00p 1.03%
FTSE 100 - Fallers
JD Sports Fashion (JD.) 84.76p -8.84%
Spirax Group (SPX) 5,795.00p -3.74%
International Consolidated Airlines Group SA (CDI) (IAG) 327.30p -2.39%
InterContinental Hotels Group (IHG) 8,734.00p -2.28%
CRH (CDI) (CRH) 7,132.00p -2.11%
Barratt Redrow (BTRW) 466.90p -2.04%
Ashtead Group (AHT) 4,303.00p -1.96%
Glencore (GLEN) 265.80p -1.90%
Croda International (CRDA) 3,059.00p -1.89%
WPP (WPP) 597.60p -1.78%
FTSE 250 - Risers
Hochschild Mining (HOC) 281.00p 3.84%
Pennon Group (PNN) 522.50p 3.67%
Zigup (ZIG) 350.00p 2.94%
Endeavour Mining (EDV) 2,146.00p 2.09%
Currys (CURY) 127.20p 1.60%
Raspberry PI Holdings (RPI) 524.75p 1.40%
Edinburgh Worldwide Inv Trust (EWI) 167.20p 1.33%
Harbour Energy (HBR) 174.50p 1.16%
Ocean Wilsons Holdings Ltd. (OCN) 1,390.00p 1.09%
Pacific Horizon Inv Trust (PHI) 602.00p 0.84%
FTSE 250 - Fallers
Ferrexpo (FXPO) 63.30p -5.38%
Energean (ENOG) 878.50p -4.98%
Burberry Group (BRBY) 1,005.00p -4.10%
Close Brothers Group (CBG) 355.20p -4.05%
IntegraFin Holding (IHP) 315.00p -3.82%
Hays (HAS) 71.45p -3.25%
Auction Technology Group (ATG) 465.50p -3.22%
Genuit Group (GEN) 393.00p -3.20%
Morgan Advanced Materials (MGAM) 213.00p -3.18%
Workspace Group (WKP) 407.50p -2.98%
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