21st Oct 2026 17:04
(Alliance News) - Stocks in London made modest progress on Wednesday, despite accelerating UK inflation, with strong results from SpaceX giving sentiment a lift.
In London, the FTSE 100 index ended up 19.88 points, 0.2%, at 10,752.88. The FTSE 250 ended up 75.02 points, 0.3%, at 24,439.78, and the AIM all-share ended up slightly at 763.12.
The Cboe UK 100 ended up 0.2% at 1,067.41, the Cboe UK 250 closed 0.2% higher at 21,522.64, and the Cboe small companies rose 1.0% to 19,130.62.
The blue-chip FTSE 100 had earlier opened lower after stronger-than-expected inflation figures, increasing pressure on the Bank of England to raise interest rates next month.
The rise, alongside higher-than-forecast public borrowing, also adds to the challenges facing Chancellor John Healey ahead of next week's UK government budget.
The Office for National Statistics on Wednesday said annual consumer price inflation picked up to 3.5% in September from 3.1% in August, exceeding the FXStreet-cited market consensus of 3.4%.
It was the highest annual inflation rate since October 2025, driven largely by higher transport costs, particularly motor fuels.
Core inflation, which strips out food and energy costs, was estimated at 2.8% year-on-year in September, up from 2.6% in August.
Services inflation was estimated at 3.7% year-on-year in September, up from 3.4% in August.
Cathal Kennedy, senior UK economist, at RBC Capital Markets said the CPI rise "removes any final obstacles to November BoE hike".
"Not only is inflation ahead of projections, but it is also set to rise further as the 4% increase in domestic utility bills on October 1 are reflected in next month's data," the economist said.
"On top of the inflation overshoot the MPC also has to factor in stronger than expected GDP growth and a labour market that isn't as weak as feared," Kennedy added.
Following the data, Peel Hunt's Chief Economist Kallum Pickering shifted his interest rate call for the November BoE meeting.
Pickering now expects a quarter point rate hike, moving from a hold.
"Today's upside surprise, the strong likelihood that both the Fed and the ECB hike again, and continued bond market worries about the longer-run sustainability of the UK's oversized state and debt trajectory together change the risk-reward calculus of holding. The underlying disinflationary story remains intact and evidence of second-round effects remains limited. But, to maintain credibility with markets, we expect the BoE to hike at the November meeting, shifting our call from a hold," Pickering stated.
The pound was quoted at USD1.3389, up from USD1.3376. Against the euro, sterling firmed to EUR1.1930 on Monday from EUR1.1901.
In European equity markets on Wednesday, the CAC 40 in Paris ended up 1.1%, while the DAX 40 in Frankfurt leapt 1.4%.
In Paris, EssilorLuxottica soared 16% as the Paris-based eyewear maker reported better-than-expected third quarter revenue after the market close on Tuesday.
But Massy, France-based supermarket chain Carrefour plunged 13% as it revised down its outlook as it reported third quarter sales, noting "the social and security situation in France."
As it revised down its guidance for 2026, the company highlighted an impact on trading and operating conditions with lower customer footfall, reduced opening hours related to curfews, as well as precautionary closures and access difficulties.
The statement fed through to London, with companies linked to trade in France on the back foot.
Kingfisher, which owns French chains Castorama and Brico Depot, was down 0.9%, while 3i, which has exposure through its investment in discount retail chain, Action, dropped 3.9%.
In New York, markets were higher. The Dow Jones Industrial Average was up 0.2% at the time of the closing bell in London on Tuesday. The S&P 500 was 0.4% higher and the Nasdaq Composite climbed 0.9%.
On Wall Street, SpaceX was the talk of the town after better-than-expected third quarter results and as CEO Elon Musk said the firm was looking at the possibility of merging with Tesla, which is also run by the billionaire.
SpaceX rose 9.7%, while Tesla, which reports results after Wednesday's closing bell in New York, climbed 3.5%. Facebook owner Meta Platforms also reports earnings on Wednesday along with other leading tech names, including SAP and Texas Instruments.
Against the dollar, the euro eased to USD1.1225 on Wednesday from USD1.1234 at the time of the London equity market close on Tuesday. Against the yen, the dollar was trading at JPY158.05, down from JPY158.13.
The yield on the US 10-year Treasury was quoted at 5.11%, unchanged from Tuesday. The yield on the US 30-year Treasury was quoted at 5.41%, narrowed from 5.43%.
Back in London, the government announced plans to start drilling at the Jackdaw gas field.
Prime Minister Andy Burnham said his centre-left administration had made a "pragmatic" decision.
"At a time when people are really struggling, it's right that we look in a responsible way at maximising the existing energy reserves we have in Britain that could help," he said.
Investors hope this could signal the green light for Rosebank, the largest untapped oil field in the North Sea, in which Ithaca Energy holds a 20% stake. Ithaca Energy closed up 1.0%.
Brent was quoted at USD109.14 a barrel, up from USD106.65.
David Morrison, analyst at Trade Nation, said: "An end to the war seems less likely than ever now, and the growing involvement of the Iranian-backed Yemeni Houthis is evidence of how the conflict is spreading."
"This week has already seen two tankers taken out of action after hitting mines in the Strait of Hormuz, and it is obvious that there's a significant danger to shipping attempting to transit the Strait."
On the FTSE 250, recruiters Michael Page and Hays led the way, up 8.4% and 5.7% respectively.
Staffing firm Randstad surged 20% in Amsterdam on well-received earnings, lifting the London listings.
But Halfords fell 8.6% as its trading update failed to inspire investors.
AJ Bell investment director Russ Mould said the statement "suggesting a weaker second half is in store has helped put the brakes on Halfords' recent share price recovery."
He said it was the "cue for some profit taking" for one of the FTSE 250's best performers in 2026, but is unlikely to "puncture" enthusiasm around CEO Henry Birch's turnaround plan in the longer term.
"The strategy of steering the business towards auto parts and repairs is helping to make revenue and cash flow more predictable and on the cycle retail side a focus on higher-margin e-bike and e-mobility market is providing a boost to profitability," Mould said.
Faring better, Mobico jumped 33%, as the National Express owner confirmed it had received a possible cash takeover proposal worth 46 pence per share from Autobuses de Leon, with its independent directors indicating they would be minded to recommend an offer on those terms.
Gold was quoted at USD4,139.04 an ounce, up from USD4,131.02.
The biggest risers on the FTSE 100 were Computacenter, up 180.00p at 5,120.00p, Lion Finance Group, up 380.00p at 12,700.00p, Experian, up 77.00p at 2,986.00p, Convatec Group, up 4.60p at 240.00p and BP, up 11.30p at 617.10p.
The biggest fallers on the FTSE 100 were Aberdeen Group, down 9.60p at 225.40p, 3i Group, down 95.00p at 2,325.00p, Burberry Group, down 26.00p at 1,072.00p, Fresnillo, down 57.00p at 2,632.00p and Antofagasta, down 68.00p at 3,224.00p.
Thursday's busy local corporate calendar has half-year results from grocer J Sainsbury and third quarter results from high street lender Barclays. In addition, trading statements are due from exchange operator London Stock Exchange Group, pest control specialist Rentokil Initial, hotel group InterContinetal Hotels Group and publisher Relx, amongst others.
Thursday's global economic calendar has wholesale inflation figures in Canada, consumer confidence reports in the eurozone and the UK, and initial jobless claims data in the US.
By Jeremy Cutler, Alliance News reporter
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