- FTSE 100 up 93 points
- UK inflation slows in December
- Core US inflation unexpectedly dips
- ...leading to UK and US govt bonds yields falling back
4.46pm: Hundred almost up
The Footsie index closed just under 100 points to the good on Wedneaday, up 1.2% at 8,301.1.
There were only nine London blue chips in red at the close, with stock markets getting a boost as gilt yields retreated on the back of better than expected inflation figures for the UK and US.
By late afternoon the 10-year gilt yield was down 16 basis points to 4.73% and borrowing costs for 30-year UK government bonds also – a welcome fall after highs reached last week.
Lloyds, Barclays and St James Place topped the FTSE 100 leaderboard, while gold miners and defensives were among the few fallers.
3.59pm: FTSE 100 heads for bumper finish
London’s blue chips headed into late trading well up, boosted by relieving inflation figures from both sides of the Atlantic.
As the day’s close approached, the FTSE 100 was trading up 93 points, or 1.1%, at 8,294.
Barclays PLC (LSE:BARC) led gains on the index, surging by 6.6%, followed by Lloyds Banking Group PLC (LSE:LLOY) and the likes of NatWest Group PLC (LSE:NWG).
Housebuilders Persimmon PLC (LSE:PSN) and Taylor Wimpey PLC (LSE:TW.) also sat among risers, with subsiding inflation in December having boosted hopes for a Bank of England rate cut next month.
Moderating core inflation across the Atlantic also sent US stocks skyrocketing, with the Nasdaq up 2.2% and leading the rally on Wall Street.
Wednesday’s positive inflation readings also saw bond yields reverse after a heavy sell-off recently, sparked by fears around the likes of stubborn price rises.
Rates on UK 30-year gilts dropped by 16 basis to 5.28%, having pushed highs last seen in 1998 in recent days.
“After the unrelenting parade of bad news on the UK economy, today’s figures are a welcome change,” IG analyst Chris Beauchamp commented.
“The problems remain however, but for now the bond vigilantes, and their equity market cousins, have gone quiet.”
3.50pm: Inflation likely to top 3% again in January
Inflation is on course to rebound once again in January after cooling in December, the National Institute of Economic and Social Research (NIESR) has warned.
As base effects contributing to moderating price rises in December disappeared, knock-on effects from October’s Budget and Donald Trump’s return to the White House were likely to begin feeding through, NIESR said in a note.
Headline inflation had receded from 2.6% to 2.5% between November and December, ONS figures showed earlier on.
NIESR noted its underlying inflation measure, which excludes the most aggressive price changes, had fallen to 1.3%, indicating increases were being driven by large movements in a few sectors.
Though Wednesday’s figures had offered relief and boosted the scope for rate cuts ahead, including in February, renewed pressure was on course to push inflation above the 3% mark once again.
“The upcoming Trump presidency has heightened global uncertainty and inflation expectations,” NIESR associate economist Monica George Michail said.
“Therefore, although we expect the MPC to gradually cut rates in 2025, we think the Bank will remain cautious, and rates may remain higher for longer.”
3.25pm: FTSE 250 skyrockets as Genus, Vistry, Currys surge
While the FTSE 100 has rallied by 92 points, or 1.1%, on the back of relieving inflation data on both sides of the Atlantic, London’s mid caps have racked up even stronger gains.
Come the afternoon, the FTSE 250 was up 487 points, or by 2.5%, as a string of solid trading updates helped fuel gains throughout the day.
Genus PLC (LSE:GNS) led the way with a 19.9% surge, after the animal genetics company said half-year adjusted pre-tax profit before would hit at least £35 million to beat expectations... Read more
Vistry Group PLC (LSE:VTY) followed suit with a 12.5% gain, having reassured investors with an update on the back of three profit warnings in as many months late last year.
Currys PLC (LSE:CURY) jumped 11.0% in the meantime, following news it would also exceed expectations on profit this year after solid Christmas trading.
Just seven companies on the index were down by the afternoon, as Bellway PLC (LSE:BWY) and Mitchells & Butlers PLC (LSE:MAB) were among others to rack up strong gains.
London’s FTSE 250 index ticked up 1.3% in the meantime, while the junior market also gained, with the AIM All-Share climbing by 0.8%.
2.55pm: Wall Street rallies after core inflation subsides
Wall Street enjoyed a rally as trading got underway on Wednesday on the back of figures showing an unexpected dip in core inflation last month.
The Nasdaq surged 1.8% after the bell, while the Dow Jones and S&P 500 jumped 1.5% each.
Figures earlier on had shown headline inflation accelerated as expected to 2.9% in December, as the core rate subsided in a surprise turn to 3.2%.
Bets for rate cuts in 2025 had been dashed by the likes of strong job market data in the run-up to Wednesday inflation figures, leaving eyes on any signs that stubborn price rises were moderating.
“The market had priced out expectations of any rate cuts up to October, an impressive swing over the last couple of months,” Validus Risk Management chief investment officer Kambiz Kazemi said.
“If this number is followed by similarly stable prints, we would expect the US dollar to soften and both the market and the Fed to adopt a less hawkish tone.”
The dollar faced a sharp drop on the back of the figures, losing 0.65% to the pound and dropping 0.27% versus to euro.
Among equities, Goldman Sachs was one of the day’s major early movers, surging 5% after trouncing expectations with fourth quarter results... Read more
2.02pm: Pound surges as bond yields plummet on US inflation data
Figures showing a surprise dip in core US inflation last month sent the pound surging against the dollar and bond yields tumbling on Wednesday.
Sterling jumped 0.5% against the greenback to US$1.2276 on the figures, which showed headline inflation accelerated as expected in December, but core inflation scaling back from 3.3% to 3.2%.
Yields on 10 and 30-year UK gilts dropped sharply by 15 and 13 basis points to 4.73% and 5.31% respectively in the meantime, as prices clawed back after recent sell-offs.
Bond yields across Europe also fell back sharply, while the euro racked up a 0.25% gain against the dollar to reach US$1.0334.
1.50pm: Subsiding core US inflation a ‘relief’ - analyst
Subsiding core inflation in the US will spell good news for markets and any hopes for rate cuts this year, according to CMC Markets analyst Jochen Stanzl.
“This is exactly what the bulls on Wall Street were hoping for,” Stanzl said, after figures on Wednesday showed core inflation came in at 3.2% last month, against 3.3% in November.
Stanzl added the slowing rate was “a relief” and that, while the Federal Reserve’s caution on future interest rate cuts was right, there was “some hope” of at least one reduction in 2025.
“Even after today's data, the markets will probably continue to find themselves in a period in which they are adjusting to the fact that interest rates will remain higher for longer,” Stanzl said.
“The inflation data will, however, help to somewhat weaken this conviction.”
Futures had the Nasdaq rallying 1.7% ahead of the open, while the S&P 500 and Dow Jones were each seen 1.4% higher.
Back in London, the FTSE 100 surged 87 points to 8,288 on the back of the figures.
1.36pm: US inflation accelerates as expected
Inflation across the United States accelerated as expected in December, figures showed on Wednesday.
According to the US Bureau of Labor Statistics, the consumer price index ticked up from 2.7% to 2.9% on an annual basis between November and December.
Core inflation, excluding energy and food prices, climbed by 3.2% in the meantime, slowing against November’s 3.3% and undershooting expectations for a flat reading.
On a monthly basis, headline inflation rose by 0.4%, compared to 0.3% in November, while the core rate slowed from 0.3% to 0.2%.
Futures continued to point to a positive open on Wall Street after the figures.
1.26pm: Treasury auctions off another £4bn of bonds
Another £4 billion worth of public debt was auctioned off on Wednesday, with the cost for the government hitting its highest level since 2008.
Gilts maturing in 2034 were sold with a yield of 4.808%, the UK Debt Management Office said, with bids covering 2.8 times the amount of debt on offer.
This meant the bonds were sold at the highest yield in 17 years and that demand had stooped to its lowest in more than 12 months.
1.17pm: JPMorgan posts record profit Wall Street banks report
JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) has beaten expectations with record annual profit to kick off earnings season on Wall Street in style.
Profit last year hit US$58.5 billion, against US$49.6 billion in 2023, aided by a fourth-quarter increase to US$14 billion, from US$9.3 billion previously… Read more
Goldman Sachs also smashed forecasts, with fourth quarter per-share earnings of US$11.95, against expectations for US$8.22… Read more
Blackrock Inc said assets under management had hit a record US$11.6 trillion in the meantime.
JPMorgan climbed 1.8% in pre-market trading, while Goldman gained 1.5% and Blackrock ticked up 0.6%.
Wells Fargo & Co (NYSE:WFC, ETR:NWT) and CitiGroup Inc surged 3.8% each meanwhile after also posting strong figures.
12.51pm: Energy project applications halted as grid connection waits mount
Energy firms will face a temporary ban on applying for grid connections after wait times for the likes of new solar and wind projects have mounted.
Britain’s National Energy System Operator (NESO) on Wednesday said new entrants would no longer be able to apply to join the grid from late January to allow time for reform.
Projects have come up against delays of up to 14 years when attempting to secure energy grid connections due to a backlog of often unfeasible plans being assessed on a first come first serve basis.
NESO said that 1,700 applications had been received last year alone, taking projects already in the queue above levels required for ‘the energy system in 2030 or even 2050”.
“Our reforms prioritise projects which are ready to progress, and which are needed to deliver clean power by 2030,” NESO connections reform director Matt Vickers said.
“To reorder the queue, we need to start from a stable base.
“This short pause in applications will allow us to work with colleagues across the network companies to prepare for the new processes we need to bring forward the electricity projects needed for the delivery of clean power by 2030 and beyond.”
12.25pm: Business confidence hits lowest level since mini-Budget
Business confidence has hit its lowest level since the fallout of Liz Truss’ mini-Budget as firms brace for tax hikes by chancellor Rachel Reeves.
Accountancy body ICAEW’s business confidence monitor showed a reading of 0.2 for the final quarter of 2024, against 14.4 in the previous three months.
Sentiment among businesses had hit its lowest since the final quarter of 2022 as a result, driven by muted sales and looming tax increases unveiled by Reeves in October’s Budget.
“Our data suggests that the UK economy endured a rather traumatic end to 2024,” ICAEW economics director Suren Thiru commented.
“Slowing domestic activity and the aftershocks from a difficult Budget caused business confidence to nosedive.”
Reeves had announced a higher rate and lower threshold for employer national insurance in the Budget, landing businesses with a £25 billion tax hike from April.
ICAEW chief executive Alan Vallance noted there was “little surprise” over the drop, given the “costs of October’s Budget fell almost solely on business”.
12.04pm: Wall Street set for gains ahead of inflation data
Wall Street appeared on course for a bright start on Wednesday as traders awaited key inflation figures for December.
Futures had the Nasdaq and Dow Jones both up by 0.4% ahead of the opening bell, while the S&P 500 was seen 0.3% higher.
Wednesday’s inflation figures have drawn focus after bets for Federal Reserve rate cuts in 2025 were slashed earlier in the week following strong job market data last week.
Expectations are for inflation to have accelerated from 2.7% to 2.9% between November and December, with the core rate seen remaining flat at 3.3%.
“At the very least, the Fed will require substantial progress on disinflation before taking further action,” Tickmill Group partner Patrick Munnelly commented.
“Without that, demand remains too strong to justify any additional easing, compounded by uncertainties in trade policy.”
11.50am: Loungers climbs as £354mln takeover recommended
Loungers PLC (AIM:LGRS) gained on Wednesday after putting a £354 million takeover bid from Fortress Investment Group to shareholders.
New York-based Fortress had offered 325p per share in cash, Loungers said on Wednesday, valuing the chain at £354.4 million.
This marked a 4.8% increase on its previous offer of 310p per share made in November, the Lounge, Cosy Club and Brightside brand owner added.
“We are very pleased that Fortress has decided to increase its offer,” chief executive Alex Reilley commented.
He added the new offer was “even more compelling for Loungers shareholders” and reinforced the board’s “recommendation that they should vote in favour of the acquisition”.
Shares climbed 4.2% to 321p on Wednesday.
11.25am: Banks holding off mortgage hikes despite wider turmoil
Lenders are holding off hiking mortgage rates in a battle to win over prospective buyers despite facing squeezed margins on the back of recent market turmoil.
According to Reuters-cited industry sources, banks’ appetite to lend has outstripped fears around higher funding costs.
Swap rates, which determine mortgages, have jumped in line with a rise in UK government borrowing costs on the back of a bond market sell-off over fears around stubborn inflation and low economic growth.
Two-year swaps have hit their highest since last July at 4.6%, while five-year swaps have risen to 4.52% and a level last seen in late 2023.
Average two and five-year mortgage rates had climbed just 0.02% between Friday and Tuesday though, according to Moneyfacts, leaving the latter at 5.27%.
Mortgage demand has remained competitive, one source highlighted, adding banks were prepared to face lower margins in order to buoy activity.
Lloyds Banking Group PLC (LSE:LLOY), NatWest Group PLC (LSE:NWG), HSBC Holdings PLC (LSE:HSBA), Barclays PLC (LSE:BARC) and Nationwide Building Society are among those grappling for market share as a result.
Moneyfacts finance expert Rachel Springall noted there were “millions” set to soon come off fixed deals, “so remortgage activity will be booming in 2025”.
10.48am: Bitcoin holds higher ahead of US inflation data
Bitcoin ticked up before Wednesday's US inflation data after trading this week had seen the cryptocurrency dip early on before rebounding towards the US$100,000 mark again.
Come mid-morning on Wednesday, Bitcoin was up 0.4% for the day at US$96,928.
The cryptocurrency had briefly stooped below the US$90,000 mark on Monday, as axed Federal Reserve rate cut bets following strong US job market data last week took Bitcoin further from its December all-time peak of over US$108,000.
Wednesday’s US inflation figures have drawn attention as a result, with markets mulling any scope for further rate cuts in 2025 on fears of stubborn inflation.
Expectations are for inflation to have accelerated from 2.7% to 2.9% between November and December, with the core rate seen remaining flat at 3.3%.
Among smaller tokens, Ethereum headed 0.3% lower to US$3,216 before Wednesday’s inflation figures.
Ripple rallied 6.2% to US$2.84 in the meantime, as speculation built around the Security and Exchange Commission ditching a case against the crypto firm ahead of a deadline to file a brief on Wednesday.
10.00am: FTSE 100 holds gains as housebuilders surge
London’s blue chips remained on the front foot on Wednesday morning on the back of figures showing inflation cooled last month.
The FTSE 100 added 55 points to reach 8,256, placing the index among the biggest risers across Europe, where stocks were also largely in the green.
Persimmon PLC (LSE:PSN) topped the FTSE 100’s risers with a second day of strong gains, rising by 4.2% ahead of the likes of peers Barratt Redrow PLC (LSE:BTRW) and Taylor Wimpey PLC (LSE:TW.).
News of slower inflation has raised expectations for a February interest rate cut by the Bank of England, adding to positive news from the housebuilder sector in recent days.
Persimmon itself had flagged high-end profit expectations for the year on Tuesday, while peer Vistry Group PLC (LSE:VTY) also offered a reassuring update on Wednesday, sending shares up 9.2% after a string of recent profit warnings weighed.
Elsewhere among the biggest FTSE 100 risers, Lloyds Banking Group PLC (LSE:LLOY) gained 3.2%, as Diploma PLC (LSE:DPLM), Severn Trent PLC (LSE:SVT) and St James’s Place PLC also headed higher.
Mid and small-caps also enjoyed a strong showing on Wednesday morning, with the FTSE 250 adding 1.4% and the AIM All-Share up 0.4%.
Currys PLC (LSE:CURY) remained among the FTSE 250’s risers, alongside Vistry, having gained 11.0% on news it expected to top profit expectations this year.
9.42am: Fullers flags ‘really strong’ Christmas as sales surge
Pub chain Fuller Smith & Turner PLC (AIM:FSTA) has flagged a “really strong Christmas” after sales over the key festive period surged.
Sales jumped by 10.2% over the five-week period, Fullers said on Wednesday, with a consistent performance seen across all parts of its estate.
As a result, sales for the 41 weeks of this so far are up by 5.9%, which is well ahead of the competition, it added
Simon Emeny, chief executive, said: “We have delivered great results throughout 2024, and this has been enhanced with a really strong Christmas”... Read more
Shares gained 0.7% on the back of the update.
9.12am: Experian flags 'subdued' UK but backs guidance
Experian PLC (LSE:EXPN) has doubled down on guidance after third-quarter revenue ticked up despite “subdued” trading in the UK.
Global organic revenue climbed by 6% in the three months to December, or by 8% when excluding foreign exchange headwinds, Experian reported on Wednesday.
Growth across other regions outstripped that seen in the UK, however, where revenue ticked up by 1% on a constant currency basis.
Experian noted business-to-business revenue fell, despite new initiatives being rolled out, while consumer services turnover increased.
“A subdued UK economic backdrop and other one-time factors weighed on growth in the quarter,” it said.
North and Latin American revenue, which accounts for the majority of Experian’s turnover, picked up by 6% and 8% at constant currency respectively.
Revenue in Experian’s smaller European, Middle East, African and Asian markets also rose, by 9%.
“We delivered another strong quarter of growth,” chief executive Brian Cassin commented, adding guidance was unchanged on the back of the results.
“We continue to expect organic revenue growth of between 6% [and] 8% and margin accretion at the upper end of 30 [to] 50 basis points.”
Shares were flat on Wednesday.
8.46am: Meta to axe 5% of staff globally
Facebook and Instagram owner Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) has told staff of plans to cut around 5% of its global workforce.
Chief executive Mark Zuckerberg signalled 2025 would be an “intense year” and that Meta planned to “move out low performers faster” in a Bloomberg-cited memo on Tuesday.
A separate message said Meta was “exiting approximately 5% of our lowest performers,” signalling its largest round of cuts since 21,000 staff were laid off in 2022 and 2023.
Meta employs over 72,000 people, according to its latest report, leaving some 3,600 jobs at risk from the latest cuts.
Affected staff are expected to be notified by February 10, with Meta planning new hirings later in the year to fill the roles.
“I’ve decided to raise the bar on performance management,” Zuckerberg said.
“We typically manage out people who aren’t meeting expectations over the course of a year, but now we’re going to do more extensive performance-based cuts during this cycle.”
Further cuts come after Meta recently unveiled plans to axe third-party fact checkers and prioritise free speech as Donald Trump’s return to the White House loomed... Read more
8.27am: February rate cut bets hiked on slowing inflation
Markets have upped bets on a Bank of England interest rate cut following slower-than-expected inflation in December.
A 74% chance of an interest rate cut at the central bank’s next meeting in February was being priced in on Wednesday morning, against 62% prior to the inflation figures.
Lale Akoner, eToro analyst, noted core inflation and services inflation had cooled “most importantly”.
ONS figures showed the core rate, which excludes volatile energy and food costs, slowed from 3.5% to 3.2% and was below expectations for 3.4%.
Services inflation came in at 4.4%, from 5.0% in November, in the meantime, to reach its lowest level since March 2022.
“Bottom line, the Bank of England will likely feel emboldened to continue its easing cycle in February,” Deutsche Bank’s Sanjay Raja added.
“The slowdown [...] was broad-based. Softer rents inflation, transport and travel services inflation, and hospitality and leisure inflation all contributed to the downside miss.”
8.12am: Stocks jump, bond yields drop after inflation slows
London’s blue chips enjoyed a solid start on Wednesday following figures showing inflation slowed in December.
The FTSE 100 added 55 points at the open to reach 8,257, led by Persimmon PLC (LSE:PSN) and the likes of housebuilding peers.
ONS data earlier on showed the consumer price index climbed by 2.5% in December, against November’s 2.6% rise and expectations for another 2.6% uptick.
Nutmeg investment strategist Scott Gardner noted slowing price rises would allow policymakers and Treasury officials a “sigh of relief”.
“In the lead up to this release, it was clear that markets could not afford any surprises after a troubling period which saw UK assets hit by fears of low economic growth and persistent inflation,” he said.
“This data will hopefully allay some of those concerns,” he added, noting slower inflation increased scope for a Bank of England interest rate cut in February.
Sterling regained some ground against the dollar on Wednesday, climbing by 0.14% to US$1.2233.
The bond market also appeared to welcome the figures, with 10 and 30-year gilt yields falling by eight and six basis points respectively to 4.81% and 5.39%.
Elsewhere among equities, Currys PLC (LSE:CURY) jumped 11.7% after signalling expectation-beating profit for the year.
Vistry Group PLC (LSE:VTY) also jumped, by 6.0%, after a reassuring update on the back of three profit warnings in as many months late last year... Read more
8.00am: Currys eyes profit beat and dividend after Christmas
Currys PLC (LSE:CURY) has guided for expectation-beating profit this year and said it will reward shareholders after strong trading around Christmas.
Adjusted pre-tax profit growth of 23% to 31% to between £145 million and £155 million was guided in a statement on Wednesday, against consensus for £140 million.
A final dividend of around 1.3p per share was also expected to be declared for the year, Currys said, given “strong cash flow” and “momentum”.
Revenue over the peak festive season climbed by 2%, taking year-to-date sales growth to 2%.
“This peak, customers took advantage of our market-beating deals and best-ever availability,” chief executive Alex Baldock commented.
“AI laptops, where we have 75% market share, and premium mobiles proved especially popular”... Read more
7.40am: ASOS to shut Atlanta site in US distribution reshuffle
ASOS PLC (LSE:ASC) will shut its Atlanta distribution centre in the US under wider efforts to boost profitability.
US customers will be served by ASOS’ automated UK fulfilment centre in Barnsley, a smaller local site and partners, the online clothing retailer announced on Wednesday.
A £10 million to £20 million annualised benefit to pre-tax earnings was anticipated from 2026 on the move, ASOS said, though a £190 million impairment was expected this year.
ASOS noted seven employees would be directly affected, while third-party logistics partners would “make efforts to redeploy several hundred staff”.
7.16am: Stocks seen bouncing as inflation slows
London’s blue chips were set for a boost on Wednesday after figures showed inflation slowed in December.
Office for National Statistics figures on Wednesday showed the consumer price index rose by 2.5% in December, against 2.6% a month earlier.
This was also below market expectations for another 2.6% uptick, with inflation on a monthly basis at 0.3% against expectations for 0.4%.
Core inflation, excluding volatile energy and food costs, slowed from 3.5% to 3.2% and was also below expectations for a 3.4% rise.
“Inflation eased very slightly as hotel prices dipped this month, but rose a year ago,” ONS chief economist Grant Fitzner commented.
“The cost of tobacco was another downward driver, as prices increased by less than this time last year.
“This was partly offset by the cost of fuel and also second-hand cars, which saw their first annual growth since July 2023.”
Futures had the FTSE 100 up 41 points at 8,242 ahead of Wednesday’s open on the back of the figures.
Overnight, Asian markets saw a mixed showing following a similar story on Wall Street, where the Nasdaq closed Tuesday’s session lower but the S&P 500 and Dow rose.
5.00am: Wednesday's schedule
Currys, Hays and Vistry will be in focus on Wednesday, alongside inflation figures from both sides of the Atlantic.
Currys surged on hype around growing AI laptop demand last time out... Read more
Vistry's update comes hot on the heels of three profit warnings in as many months... Read more
Announcements due:
Trading updates: Currys PLC (LSE:CURY), Experian PLC (LSE:EXPN), Vistry Group PLC (LSE:VTY), Xaar PLC, Fuller, Smith & Turner PLC, Hays PLC
Interims: Gateley Holdings PLC
Finals: Victorian Plumbing Group PLC
US earnings: BlackRock Inc, Citigroup Inc, Goldman Sachs, JPMorgan Chase & Co (NYSE:JPM, ETR:CMC), Wells Fargo & Co (NYSE:WFC, ETR:NWT)
Economic announcements: Consumer Price Index (UK), Producer Price Index (UK), Retail Price Index (UK), Consumer Price Index (US), Crude Oil Inventories (US)