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London stocks on the FTSE 100 were just a smidgen higher in early trade on Wednesday following the release of hotter-than-expected UK inflation figures and amid tensions in the Middle East.
At 0915 BST, the FTSE 100 was 0.1% firmer at 8,785.84, while the pound was up 0.3% against the dollar at 1.3418.
Data 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, Intermediate Capital was the standout performer on the FTSE 100 as it reported a “milestone” financial year, with assets under management up 14% at $112.4bn.
Babcock gained after JPMorgan lifted its price target on the stock to 1,100p from 1,000p.
SSE and Severn Trent both advanced after full-year results.
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.
Marks & Spencer fell 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.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo | +3.46% | +36.00 | 1,077.00 |
| 2 |  |
Intermediate Capital Group Plc | +2.82% | +58.00 | 2,112.00 |
| 3 |  |
Banco Santander S.a. | +2.39% | +14.00 | 600.00 |
| 4 |  |
Aib Group Plc | +2.16% | +12.00 | 568.00 |
| 5 |  |
Severn Trent Plc | +1.73% | +47.00 | 2,760.00 |
| 6 |  |
Phoenix Group Holdings Plc | +1.69% | +10.50 | 632.00 |
| 7 |  |
Wheaton Precious Metals Corp. | +1.64% | +100.00 | 6,200.00 |
| 8 |  |
Bae Systems Plc | +1.59% | +28.50 | 1,825.00 |
| 9 |  |
Centrica Plc | +1.27% | +2.00 | 158.90 |
| 10 |  |
Rolls-royce | +1.27% | +10.40 | 828.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | -2.54% | -39.50 | 1,518.00 |
| 2 |  |
Barratt Redrow Plc | -2.16% | -10.30 | 466.30 |
| 3 |  |
Bt Group Plc | -1.82% | -3.10 | 166.95 |
| 4 |  |
Ashtead Group Plc | -1.82% | -80.00 | 4,309.00 |
| 5 |  |
Ferguson Enterprises Inc. | -1.68% | -230.00 | 13,440.00 |
| 6 |  |
Intercontinental Hotels Group Plc | -1.63% | -146.00 | 8,792.00 |
| 7 |  |
Crh Plc | -1.54% | -112.00 | 7,174.00 |
| 8 |  |
Flutter Entertainment Plc | -1.46% | -270.00 | 18,175.00 |
| 9 |  |
International Consolidated Airlines Group S.a. | -1.43% | -4.80 | 330.50 |
| 10 |  |
Wpp Plc | -1.25% | -7.60 | 600.80 |
US close: S&P 500 rally runs out of steam as bond yields rise
US stocks fell on Tuesday, with the S&P 500 snapping a six-day winning streak as bond yields crept higher, with gloomy comments from JPMorgan’s boss dampening the mood.
During the bank’s investor event in New York, JPMorgan chief executive Jamie Dimon said American asset prices are “still […] kind of high”.
He said that investors are underestimating the impact of Donald Trump’s trade tariffs which remain at a “pretty extreme” level, and that markets were showing “an extraordinary amount of complacency”.
The Dow finished 0.3% lower while the S&P 500 and Nasdaq both fell 0.4% – though a late rally meant that all three indices finished firmly above their intraday lows.
Still, this was the first session since 9 May that the S&P 500 has closed in the red, with the index still up more than 19% since hitting a year-to-date low on 8 April.
Markets were still digesting Moody’s decision on Friday to cut its rating on US government debt from the highest rating Aaa to Aa1 as a result of the country’s eye-watering $36trn debt pile and growing interest costs. The downgrade means that none of the three major credit ratings agencies now rate US debt as the highest quality.
While stocks held up well on Monday as bond yields held steady, a 7.3 basis-point jump in the 10-year US Treasury yield to 4.527% early on Tuesday caused some concern, with yields hitting levels not seen since February. By the close of trade on Wall Street, yields were trading at 4.488%, up 3.4bp on the day.
Market movers
Home Depot erased earlier gains to finish lower after mixed quarterly earnings report. However, it was likely comments from CFO Richard McPhail that were steering sentiment after he told CNBC that the DIY retailer wouldn’t need to lift prices as a result of tariffs.
“Because of our scale, the great partnerships we have with our suppliers and productivity that we continue to drive in our business, we intend to generally maintain our current pricing levels across our portfolio,” McPhail said in a CNBC interview.
Uber also fell after rising early on following the announcement of a partnership with Waymo to bring autonomous ridesharing to Atlanta.
Drug companies Moderna and Pfizer were making gains after the FDA’s new guidance on future Covid-19 vaccine boosters was taken positively.
Wednesday newspaper round-up: Thames Water, Anglian Water, Telegraph, Greenergy
Two of Britain’s biggest water companies, Thames Water and Anglian Water, face more than 50 criminal investigations between them as part of a crackdown on sewage dumping, the government has said. The utilities were subject to the bulk of a record 81 investigations into water companies between last July’s general election and March 2025, according to new data. – Guardian
A £25m post-Brexit border control post in Portsmouth may have to be demolished if the UK government’s deal with the EU removes the need for health and veterinary checks on food imports, according to the port’s director. Mike Sellers had already spoken out last year about how more than half of the site would never be used because planned checks on EU food and plant products had been pared back since it was designed, leading to the building being called a “white elephant”. – Guardian
Tory peers are poised to defy their party leadership and seek to block a deal to hand the United Arab Emirates a stake in The Telegraph. A split has emerged since Lisa Nandy, the Culture Secretary, said last week that she would change the law to allow foreign states to own up to 15pc of British newspapers. – Telegraph
Ed Miliband must consider raising taxes or gas bills if the UK is to have any hope of hitting net zero, the Government’s climate change quango has warned. To ensure his flagship policy succeeds, the Climate Change Committee (CCC) said the Energy Secretary needs to remove green levies from household power costs. However, to pay for this, it said the levies should be shifted onto gas bills or covered by general taxation. The quango stopped short of saying which one it preferred. – Telegraph
One of Britain’s four remaining biodiesel plants is at risk of being shut because of competition from subsidised American imports, in the latest sign of distress in the biofuels sector. Greenergy, owned by the commodities trading giant Trafigura, said that it had temporarily suspended operations at its Immingham site in Lincolnshire while it conducted “a strategic review to evaluate the plant’s commercial viability amid the significant challenges facing the UK biofuels industry”. – The Times
