17th Sep 2025 09:02
(Alliance News) - European equities edged cautiously higher on Wednesday morning, ahead of an expected Federal Reserve rate cut, with eyes on just how dovish the US central bank gets in the face of labour market weakness.
On the eve of the Bank of England decision, meanwhile, the UK central bank was faced with inflation data that was cooler than expected, but still well above the 2% target.
The FTSE 100 index edged up 7.07 points, 0.1%, at 9,202.73. The FTSE 250 rose 55.60 points, 0.3%, at 21,547.47, and the AIM All-Share was up 0.45 of a point, 0.1%, at 768.32.
The Cboe UK 100 was up 0.1% at 922.03, the Cboe UK 250 was 0.2% higher at 18,875.21, but the Cboe Small Companies was 0.1% lower at 17,093.60.
In Paris, the CAC 40 was 0.1% higher. In Frankfurt, the DAX 40 was up 0.3%.
Sterling bought USD1.3632 against the dollar early Wednesday, down slightly from USD1.3642 at the time of the London equities close on Tuesday.
The UK consumer price inflation rate was steady in August, landing slightly cooler than expected, numbers on Wednesday showed.
The pace of annual consumer price inflation was 3.8% in August, unchanged from July. The latest reading fell short of the FXStreet-cited consensus, as an acceleration to 3.9% was forecast by consensus.
On a monthly basis, consumer prices rose 0.3% in August, as expected, after a 0.1% rise in July from June.
Annual service price inflation eased to 4.7% in August, from 5.0% in July.
The reading comes a day before the next Bank of England decision, where the central bank is expected to leave rates unchanged at 4.00%.
Analysts at Lloyds Bank commented: "It is unlikely that the composition of this month’s inflation outturn will assuage MPC concerns about elevated inflation expectations. It is difficult to see there is much here to impact market expectations for the BoE."
Wednesday's economic calendar has the Fed decision at 1900 BST, after eurozone consumer price index data at 1000.
The yield on the US 10-year Treasury was quoted at 4.02% on Wednesday morning, easing from 4.05% at the time of the London equities close on Tuesday. The yield on the US 30-year Treasury was quoted at 4.64%, narrowing from 4.66%.
The euro was largely flat at USD1.1839 from USD1.1837, while against the yen, the dollar barely budged at JPY146.64 compared to JPY146.65.
ING analysts comme0tned: "All eyes are on tonight's Fed meeting, where a 25bp rate cut is widely expected. The dollar has been selling off ahead of this event, but there are a few risks. For example, we could see short-dated US rates back up a little and the dollar get a brief bid if the Fed dot plots continues to show just 50bp of rate cuts this year compared to the 70bp now priced.
"There are some upside event risks to the dollar from the dot plot – and perhaps from Powell's press conference too. Nonetheless, today should confirm that the Fed is embarking on a 125bp easing cycle."
An ounce of gold fell to USD3,670.61 an ounce Wednesday morning, from USD3,680.32 at the time of the London equities close on Tuesday, while Brent was lower at USD68.21 compared to USD68.32. Gold hit another record high on Tuesday, topping the USD3,700 an ounce mark.
Fresnillo was the worst FTSE 100 performer, fading 3.8% on the lower gold price. Shares in the gold miner are up almost four-fold over the past 12 months, however.
Barratt Redrow rose 1.8%, as it reported a profit beat but home completions below forecast.
For the year ended June 29, the housebuilder's adjusted pretax profit totalled GBP488.3 million, or GBP591.6 million before purchase price adjustments. Back in July, it predicted an adjusted pretax profit before PPA in line with consensus of GBP582.6 million.
Total home completions were 16,565, down from 17,972 achieved by Barratt and Redrow together in the prior year, but up from 14,004 from Barratt alone.
"We have delivered a solid performance in a tough market, with adjusted profits ahead of expectations despite home completions coming in slightly below our guided range. The acquisition of Redrow is transformative for the group, and I am pleased with the progress we have made on delivering synergies ahead of our targets and executing a successful integration, which is now largely complete. I'd like to thank our employees, subcontractors and supply chain partners for the huge contributions they made to our performance this year," Chief Executive David Thomas said.
Looking ahead, the firm said: "Based on the solid reservation activity seen since the start of the new year and assuming no material change to market conditions because of economic or political changes in the coming months, we expect to deliver total home completions of between 17,200 and 17,800 in FY26. This also assumes a normal autumn selling season, our current expectation, however the extended period through to the budget and related uncertainties around general taxation and that applicable to housing, has introduced additional risk."
Moonpig advanced 5.7%. It said it is on track to achieve annual guidance as it reported order growth and a "continued expansion of our active customer base". The greetings card and gifting firm said so far in its financial year, which began on May 1, "trading momentum has continued".
"Moonpig continues to deliver consistent revenue growth at approximately 10% year on year. Greetz trading has improved sequentially, with revenue now showing modest year on year growth on both a reported and constant currency basis," it added. "Growth in orders is underpinned by the continued expansion of our active customer base. Customers are increasingly embracing our innovative personalisation features to express themselves, with adoption continuing to rise - around 50% of all cards now including options such as AI-generated stickers, audio or video messages, or personalised handwriting. Moonpig and Greetz Plus subscriptions have now surpassed one million members with numbers continuing to grow each month. Together, rising adoption of personalisation and the expansion of Plus are deepening customer engagement and strengthening purchase frequency."
Moonpig still expects adjusted earnings before interest, tax, depreciation and amortisation to rise at a "mid-single digit" percentage rate for the full-year, and adjusted earnings per share to climb between 8% and 12%.
Moonpig added: "Strong free cash flow generation is expected to fund both ongoing investment in our growth strategy and returns to shareholders, comprising dividends and our FY26 share repurchase programmes of up to GBP60 million."
Industrial materials and technology business Autins sank 50% on AIM. The firm achieved revenue of GBP7.7 million in the first five months of its new financial year, which concludes on March 31, down from GBP8.0 million in the equivalent period. Its pretax loss narrowed to GBP258,000 from GBP714,000.
"The automotive industry continues to see volatile trading conditions as a result of delayed new model introduction, confusion over government legislation and changing trade tariffs. Further, following its recent cyber incident, JLR, the group's major customer, stopped all production in the UK on 1 September, which has had a material effect on the group's UK operations. The company remains in dialogue with JLR, and awaits further guidance from JLR regarding the recommencement of production," it added.
"In the interim, Autins has taken proactive measures to reduce the group's exposure to this incident, including the utilisation of our banked hours system for employees, delaying or cancelling our raw material orders and pausing discretionary spend across the business."
By Eric Cunha, Alliance News news editor
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