FTSE 100 Recovers After Global Slump Despite Surging UK Inflation
London’s equity markets showed resilience on Wednesday morning, edging higher as investors balanced a hotter-than-expected UK inflation report against a flurry of corporate earnings. The recovery follows a sharp global selloff on Tuesday triggered by geopolitical tensions.
Market Snapshot
The FTSE 100 gained 2.57 points to reach 10,129.35 at the open. Mid-cap and small-cap indices showed more robust momentum:
- FTSE 250: Up 0.4% at 23,037.12.
- AIM All-Share: Up 0.7% at 806.91.
While London stabilized, European peers remained cautious, with the Paris CAC 40 down 0.1% and the Frankfurt DAX 40 slipping 0.3%. In the currency markets, Sterling softened slightly to $1.3438.
Inflation Hits 3.4%, But Experts Urge Calm
Fresh data from the Office for National Statistics (ONS) revealed that UK inflation accelerated in December. The headline Consumer Prices Index (CPI) rose to 3.4%, surpassing the 3.3% consensus and November’s 3.2%.
The ONS identified alcohol, tobacco, and transport as the primary drivers. Notably, tobacco prices spiked following the November Budget, and airfares surged 28.6% during the pre-Christmas travel peak.
Despite the uptick, Pepperstone analyst Michael Brown suggested the Bank of England is unlikely to pivot to a more hawkish stance immediately.
“It is near-certain that policymakers will look through these one-off factors… the overall disinflationary trend remains broadly intact,” Brown noted, adding that a rate hold in February remains the most likely outcome.
Corporate Highlights: Luxury and Mining Lead, Pubs Lag
A busy morning of trading updates saw significant swings for several blue-chip companies:
| Company | Index | Movement | Key Driver |
| Premier Foods | FTSE 250 | +6.6% | Expects full-year profit at the upper end of market guidance. |
| Burberry | FTSE 100 | +5.6% | Q3 retail revenue rose to £665m; profit outlook remains on track. |
| Rio Tinto | FTSE 100 | +4.9% | Reported record Q4 iron ore production in the Pilbara region. |
| Experian | FTSE 100 | -5.3% | Despite 12% revenue growth, shares fell as the top decliner. |
| JD Wetherspoon | FTSE 250 | -6.6% | Warned of lower annual profits due to a £45m surge in costs. |
Global Backdrop: Trump and Gold Records
Investors continue to monitor US President Donald Trump, who is traveling to the World Economic Forum in Davos. His presence comes amid ongoing international friction regarding his proposal to seize Greenland.
Meanwhile, Gold continues its historic rally, hitting a new all-time high of $4,888.43 per ounce earlier Wednesday morning as investors seek safe-haven assets amidst the geopolitical uncertainty.
