London close: Stocks rise on US inflation reading, UK data
By Josh White
Date: Friday 24 Oct 2025
(Sharecast News) - London stocks advanced on Friday as investors digested fresh US inflation data and mixed domestic economic indicators.
The FTSE 100 index rose 0.7% to 9,645.62, while the FTSE 250 added 0.75% to 22,529.02.
Sentiment was buoyed by softer-than-expected US inflation figures, which fuelled hopes that the Federal Reserve could ease policy sooner, supporting global equities.
Patrick Munnelly at TickMill noted that "the release of September's CPI data by the BLS is a rare exception, as all other reports remain on hold until regular US government operations resume," adding that "even an upside surprise is unlikely to derail expectations for another Fed rate cut next week."
In the UK, retail sales data and the latest PMI reading painted a mixed picture of the economy, tempering some optimism but not enough to derail gains.
Sterling was little changed against major peers, slipping 0.21% against the dollar to $1.3298 but rising 0.28% versus the euro to €1.1438, as traders weighed the outlook for Bank of England rate cuts against global monetary policy trends.
Inflation picks up pace stateside, UK retail sales deliver strong performance
In economic news, the US consumer price index rose 0.3% month-on-month, down from 0.4% in August, but the annual rate accelerated to 3%, its highest since January.
The Bureau of Labor Statistics said food costs were the largest contributor to the monthly increase, while energy prices climbed 2.8%.
Core inflation, which excludes food and energy, eased marginally to 3%.
The figures, delayed by the ongoing government shutdown, would be the final major data release before next week's Federal Reserve meeting, where markets widely expect another 25-basis-point rate cut.
On home shores, UK retail sales delivered their strongest quarterly performance in over two years, driven by robust demand for clothing and gold jewellery.
The Office for National Statistics said sales volumes rose 0.9% in the three months to September, with a 0.5% monthly rise defying forecasts for a decline.
"Although food stores saw very little growth, good weather in July and August boosted sales of clothing, while online retailing also did well," said ONS statistician Hannah Finselbach.
AJ Bell's Danni Hewson noted that "interest rate cuts and above-inflation pay increases have meant many workers have had a bit more cash to play with," adding that the figures should bring "cautious optimism" ahead of the festive season.
However, EY Item Club's Matt Swannell warned that "underlying conditions are not quite that robust," expecting sales to moderate over the coming months.
A separate S&P Global survey showed UK private-sector growth gathering pace in October, led by a rebound in manufacturing.
The composite purchasing managers' index (PMI) rose to 51.1 from 50.1, marking the sixth consecutive month of expansion and beating expectations.
Manufacturing output turned positive for the first time in over a year despite disruption from a cyberattack on Jaguar Land Rover, while cost pressures eased to their lowest level since 2024.
"The survey brings hope that September was a low point for the economy," said S&P's Chris Williamson, though he added that overall momentum remained consistent with just 0.1% GDP growth.
Consumer sentiment also improved modestly.
GfK's long-running confidence index rose two points to -17 in October, supported by stronger appetite for big-ticket items.
"Buying sentiment is up on last month," said GfK's Neil Bellamy, citing "major retailer sales events" and adaptive spending habits among consumers ahead of the Budget and Black Friday.
In contrast, UK car and van production fell sharply in September as a cyber incident halted Jaguar Land Rover's output.
The Society of Motor Manufacturers and Traders said total production dropped 35.9% year-on-year, with commercial vehicle output plunging 77.9%.
Battery electric, plug-in hybrid and hybrid vehicles made up nearly half of all cars built, however, with output of those models up 14.7%.
The SMMT warned that proposed tax changes to employee car ownership schemes could "undermine recruitment and investment," estimating that up to 60,000 jobs could be affected.
Across the Channel, eurozone business activity accelerated at its fastest pace in 18 months.
The S&P Global/HCOB composite PMI rose to 52.2 in October, marking the 10th straight month of growth.
Germany led the upturn with its strongest reading in over two years, offsetting continued contraction in France.
"France is increasingly becoming a drag on the eurozone economy," said HCOB chief economist Cyrus de la Rubia, citing political uncertainty as a factor weighing on regional momentum.
LSEG extends rally, NatWest leads banks higher
On London's equity markets, London Stock Exchange Group climbed 4.81%, extending Thursday's strong rally after investors continued to react positively to its quarterly results and plans to sell a 20% stake in its Post Trade Solutions clearing arm to a consortium of banks in a deal valuing the business at £850 million.
NatWest Group also outperformed, rising 4.91% after the lender raised its 2025 income and returns guidance on the back of a robust third quarter.
Russ Mould at AJ Bell said, "Being fully privately owned seems to be suiting NatWest, with the company's third-quarter update the latest in the sector to help ease concerns about contagion from US private credit issues.
"Traditional lending activities - in both the mortgage and corporate market - helped the company to beat quarterly profit forecasts by an eye-catching amount and have seen guidance for the full year on income and returns nudged higher."
Kingfisher added 1.86% after RBC Capital Markets upgraded the DIY retailer to 'outperform' from 'sector perform' and lifted its price target to 350p from 320p.
The broker said it saw "further space growth opportunities" in the UK and Poland and a "positive" outlook for margins, noting that Poland's recovery should offset weakness in France.
JD Wetherspoon edged 0.23% higher, reversing earlier losses after Peel Hunt reiterated its 'hold' rating.
The broker said the pub group's valuation outlook was improving but cautioned that the upcoming Budget "offers too much uncertainty to buy the shares now".
Energean rose 2.53% after its Israeli subsidiary signed a transmission agreement with Israel Natural Gas Lines for capacity in the Nitzana pipeline, described as consistent with the group's long-term strategic focus.
On the downside, Hochschild Mining slipped 1.7% as gold prices retreated sharply, marking their steepest weekly drop in five years after a sustained nine-week rally.
Fund administrator JTC fell 2.05% after extending takeover talks with private equity firms Permira Advisers and Warburg Pincus for a third time, saying discussions remain ongoing.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 9,645.62 0.70%
FTSE 250 (MCX) 22,529.02 0.75%
techMARK (TASX) 5,584.99 0.09%
FTSE 100 - Risers
NATWEST GROUP (NWG) 572.40p 4.91%
London Stock Exchange Group (LSEG) 9,796.00p 4.81%
CRH (CDI) (CRH) 9,072.00p 2.74%
Tesco (TSCO) 455.40p 2.20%
Next (NXT) 13,435.00p 2.13%
3i Group (III) 4,437.00p 1.91%
Kingfisher (KGF) 316.90p 1.86%
Compass Group (CPG) 2,637.00p 1.81%
DCC (CDI) (DCC) 5,070.00p 1.81%
Phoenix Group Holdings (PHNX) 679.00p 1.72%
FTSE 100 - Fallers
Metlen Energy & Metals (MTLN) 42.25p -5.20%
GSK (GSK) 1,620.00p -1.61%
Airtel Africa (AAF) 228.00p -1.04%
Hikma Pharmaceuticals (HIK) 1,753.00p -0.96%
Diageo (DGE) 1,811.00p -0.82%
LondonMetric Property (LMP) 196.90p -0.81%
BAE Systems (BA.) 1,861.50p -0.53%
Imperial Brands (IMB) 3,006.00p -0.50%
WPP (WPP) 361.10p -0.47%
Coca-Cola HBC AG (CDI) (CCH) 3,460.00p -0.46%
FTSE 250 - Risers
Ithaca Energy (ITH) 210.50p 4.47%
WH Smith (SMWH) 703.50p 4.22%
4Imprint Group (FOUR) 3,305.00p 3.44%
Trustpilot Group (TRST) 213.80p 3.29%
Bakkavor Group (BAKK) 228.00p 3.17%
Marshalls (MSLH) 181.40p 2.95%
Bluefield Solar Income Fund Limited (BSIF) 81.90p 2.89%
Oxford Biomedica (OXB) 609.00p 2.87%
Edinburgh Worldwide Inv Trust (EWI) 206.50p 2.74%
Harbour Energy (HBR) 220.60p 2.60%
FTSE 250 - Fallers
THG (THG) 47.70p -2.41%
JTC (JTC) 1,338.00p -2.05%
Hochschild Mining (HOC) 347.80p -1.70%
Domino's Pizza Group (DOM) 196.90p -1.65%
SDCL Efficiency Income Trust (SEIT) 60.90p -1.62%
NCC Group (NCC) 154.60p -1.53%
Rank Group (RNK) 125.20p -1.41%
BlackRock World Mining Trust (BRWM) 655.00p -1.36%
Close Brothers Group (CBG) 428.60p -1.34%
C&C Group (CDI) (CCR) 138.40p -1.28%
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