18th Feb 2026 11:56
(Alliance News) - Stock prices in London were higher at midday on Wednesday, ahead of US industry data and as soft UK consumer inflation makes more investors count on a March rate cut.
"The latest inflation figures are encouraging, although they effectively turn the clock back to where we were a year ago, before the impact of Rachel Reeves' first budget and Donald Trump's trade skirmishes," AJ Bell's Danni Hewson said, noting that "it's everyday costs which are making an impact".
On a monthly basis in January, the UK consumer price index showed a 0.5% decline, in line with consensus and flipping from a 0.4% rise in December. Consumer prices rose 3.0% annually, also as expected, slowing from a 3.4% rise in December. Notably, the annual inflation rate for food and non-alcoholic beverages decelerated to 3.6% from 4.5%.
The core consumer price index posted a 3.1% increase, also in line with consensus and slowed from 3.2%.
Hewson continued: "For the Bank of England, the latest data could give a green light for an interest rate cut in March, with market expectation for a cut rounding off at 85% after today's release...There's growing expectation that economic conditions might be in such a way that the bank can deliver not two but three rate cuts this year, although that's far from nailed on."
The FTSE 100 index was up 105.57 points, 1.0%, at a new record high of 10,661.74. The FTSE 250 was up 61.63 points, 0.3%, at 23,617.45, and the AIM all-share was up 1.66 points, 0.2%, at 808.27.
The Cboe UK 100 was up 1.1% at 10,61.72, the Cboe UK 250 was up 0.3% at 20,919.15, and the Cboe small companies was up 0.1% at 18,537.22.
"The FTSE 100 made new record highs above 10,600 as inflation dropped more sharply than expected...This increases the chances of an interest rate cut when the Bank of England meets next month – which is typically good news for stocks and shares in general," commented AJ Bell's Russ Mould.
Diageo was the lowest FTSE 100 stock, down 2.2%. Miner Antofagasta led, up 4.2%, followed by defence contractor BAE Systems which gained 3.8% after reporting higher 2025 profit and confident growth plans.
Glencore was up 2.2%, after reporting a swing to annual profit and increased revenue.
The miner also set an ambitious target for copper operations, aiming for 1.6 million tonnes by 2035 after reporting that output fell 11% to 851,600 tonnes in 2025.
Other defence and mining firms remained in the green. Anglo American was up 2.9%, Rolls-Royce up 2.5%, and Babcock up 1.8%.
On the FTSE 250, Pan African Resources rose 3.2%.
The Johannesburg-based gold producer said it was on track for sustained growth, after profit multiplied on-year in the six months to December 31 thanks to "the very favourable current environment". Pretax profit surged to USD209.9 million, while revenue more than doubled to USD487.1 million.
Pan African declared an interim dividend of 12 South African rand cents, which is about 0.74 US cents or 0.55 pence, compared to no dividend for the prior half-year.
On AIM, vehicle operator monitoring system designer Seeing Machines dropped 20%.
Seeing Machines expects revenue between USD23.4 million and USD24.0 million for the first half ended December 31, which would be down from USD25.3 million for the previous year.
However, it also expects a narrowed adjusted loss before interest, tax, depreciation and amortisation of between USD13.1 million and USD13.7 million, and expects positive adjusted Ebitda in the third quarter and second half.
The pound was quoted higher at USD1.3571 at midday on Wednesday in London, compared to USD1.3531 at the equities close on Tuesday. The euro stood at USD1.1834, higher against USD1.1830. Against the yen, the dollar was trading higher at JPY153.68, compared to JPY153.61.
In European equities on Wednesday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.9%.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.1%.
The yield on the US 10-year Treasury was quoted at 4.07%, widening from 4.05%. The yield on the US 30-year Treasury was quoted at 4.69%, widening from 4.68%.
Brent oil was quoted higher at USD68.56 a barrel at midday in London on Wednesday, from USD67.17 late Tuesday.
Gold was quoted higher at USD4,916.56 an ounce, against USD4,882.00.
"Gold recovered slightly on Wednesday, after a decline yesterday, as markets navigated thinner liquidity conditions amid holidays in China," commented Givtrade's Antoine Nadaf. "In the meantime, the market could remain exposed to ongoing geopolitical developments and key US economic data releases.
"On the geopolitical front, reports that Washington and Tehran agreed on broad guiding principles in their discussions offered tentative optimism. However, caution over the next steps remains. In Eastern Europe, peace talks continue in parallel with ongoing hostilities, reinforcing a backdrop of persistent uncertainty that could sustain demand for the precious metal."
Ukrainian and Russian negotiators met for a second day of US-mediated talks in Geneva on Wednesday, after a "tense" first day of negotiations failed to yield a breakthrough.
Russia is pushing for full control of Ukraine's eastern Donetsk region as part of any deal, and has threatened to take it by force. But Ukraine has rejected this demand and signalled it will not sign a deal without security guarantees that deter Russia from invading again.
A source close to Russia's delegation said hours-long talks on the first day had been "very tense", and Ukrainian President Volodymyr Zelensky told US media outlet Axios that he was facing unfair pressure from Washington to make compromises.
Still to come on Wednesday's economic calendar, it's a busy afternoon for the US with releases including the Redbook index, industrial production, and Federal Open Market Committee minutes.
By Emma Curzon, Alliance News reporter
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DiageoAntofagastaBAE SystemsGlencoreAnglo AmericanRolls-RoyceBabcockPan African ResourcesSeeing Machines