London midday: Stocks tick higher as inflation, MPC members weigh on pound
London stocks had edged higher by midday as the pound fell back against the dollar following a brief pop higher after data showed inflation surged to a five-year high last month and Bank of England policymakers spoke about interest rates.
The FTSE 100 was up 0.2% to 7,539.06, while the pound was flat against the euro at 1.1231 and down 0.3% versus the dollar at 1.3207.
Figures released earlier by the Office for National Statistics showed annual UK consumer prices inflation rose to 3% in September, in line with economists' forecasts after hitting 2.9% the month before.
CPI was up 0.3% month-on-month, also as expected, following 0.6% a month earlier.
Core CPI, which excludes more volatile prices such as energy and food, remained at 2.7%, as forecast.
IG analyst Chris Beauchamp said: "Given the robust expectation that November will see the Bank of England dust off its ‘rate increase’ button, the in-line reading for annual CPI was not enough to send the pound much higher."
Investors were also digesting comments from BoE governor Mark Carney and colleagues in testimony to the Treasury Select Committee.
The Canadian said that inflation is set to peak just above 3% in the next few weeks but that this should pass through but that an interest rate hike "in the coming months may be appropriate".
However, his two new deputies on the Monetary Policy Committee cast some doubt on the likelihood of an increase in interest rates in November.
Sir Dave Ramsden, a July appointment to the MPC, said he was not part of the majority of policymakers who believed a rate hike is likely to be needed in the coming months due to his impression that inflation pressures will begin to ease.
Silvana Tenreyro, who was appointed in June, said: “My view is that we are approaching a tipping pint at which it would be necessary or justified to remove some of that stimulus. However that is very contingent on the data.”
A key item of data will be the average wage growth numbers released on Wednesday.
In corporate news, Pearson surged after saying it generated revenues in the first nine months of the year in line with expectations and it was on track to deliver in the upper half of management's guided range, with the educational publisher also fine-tuning its earnings guidance and promising a £300m share buyback.
Sainsbury's and Morrisons were on the leaderboard despite mixed sales data from Kantar Worldpanel and Nielsen, while Tesco was flat.
Theme park operator Merlin Entertainments tanked after it reported comparable revenue was broadly flat as London sites were hit by bad weather and the impact of terror attacks.
Rio Tinto nudged down after cutting its copper guidance for the year as it reported a drop in mined copper in the third quarter.
Moneysupermarket.com ticked lower after it posted a rise in third-quarter revenue overall, but revealed a drop in revenue from the money and home services divisions, while Mediclinic slumped after its half-year trading statement.
Smiths Group slipped as it appointed John Shipsey as chief financial officer designate with effect from Wednesday.
Housebuilder Bellway was on the front foot after it reported a jump in full-year profit and revenue as demand for new housing remained strong, while challenger bank Virgin Money rallied after its third-quarter update came in as expected.
AstraZeneca was a touch firmer after saying that the US regulator has accepted a supplemental biologics license application for its Imfinzi drug, granting it priority review status.
Market Movers
FTSE 100 (UKX) 7,539.06 0.16%
FTSE 250 (MCX) 20,146.24 -0.35%
techMARK (TASX) 3,552.37 -0.06%
FTSE 100 - Risers
Pearson (PSON) 664.50p 6.92%
Convatec Group (CTEC) 210.10p 2.49%
Sainsbury (J) (SBRY) 249.10p 2.26%
Barclays (BARC) 192.15p 1.53%
Severn Trent (SVT) 2,113.00p 1.49%
United Utilities Group (UU.) 842.50p 1.38%
Morrison (Wm) Supermarkets (MRW) 237.00p 1.07%
National Grid (NG.) 925.30p 0.99%
Royal Bank of Scotland Group (RBS) 276.60p 0.91%
Prudential (PRU) 1,831.50p 0.80%
FTSE 100 - Fallers
Merlin Entertainments (MERL) 366.60p -18.48%
Mediclinic International (MDC) 643.50p -4.67%
Standard Life Aberdeen (SLA) 433.70p -2.82%
Whitbread (WTB) 3,959.00p -1.76%
Johnson Matthey (JMAT) 3,390.00p -1.71%
3i Group (III) 952.50p -1.60%
St James's Place (STJ) 1,165.00p -1.52%
NMC Health (NMC) 2,857.00p -1.35%
Antofagasta (ANTO) 1,022.00p -1.16%
Burberry Group (BRBY) 1,880.00p -1.16%
FTSE 250 - Risers
Virgin Money Holdings (UK) (VM.) 297.40p 3.01%
Elementis (ELM) 287.80p 2.82%
Equiniti Group (EQN) 312.80p 1.79%
Workspace Group (WKP) 914.50p 1.55%
Greene King (GNK) 542.00p 1.50%
Supergroup (SGP) 1,837.00p 1.38%
Tullow Oil (TLW) 187.90p 1.24%
Bellway (BWY) 3,543.00p 1.14%
Ashmore Group (ASHM) 379.90p 1.04%
Electra Private Equity (ELTA) 1,743.00p 0.93%
FTSE 250 - Fallers
Hochschild Mining (HOC) 227.00p -4.62%
Sirius Minerals (SXX) 26.71p -3.40%
Ferrexpo (FXPO) 277.50p -3.34%
Cineworld Group (CINE) 680.50p -2.09%
Tate & Lyle (TATE) 640.00p -2.07%
TalkTalk Telecom Group (TALK) 210.20p -2.00%
Vedanta Resources (VED) 908.00p -1.94%
Rank Group (RNK) 230.90p -1.79%
Rightmove (RMV) 4,033.00p -1.68%
Just Eat (JE.) 708.50p -1.67%