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London stocks were set for a steady open on Wednesday as investors mulled the latest UK inflation reading.
The FTSE 100 was called to open flat at 8,191.
Figures released earlier by the Office for National Statistics showed that annual consumer price inflation fell to 2% in May from 2.3% in April, in line with expectations.
It marked the first time inflation has hit the Bank of England’s target since July 2021 and leaves the door open for a potential rate cut from the Bank this summer.
Meanwhile, core inflation – which strips out food, energy, alcohol and tobacco – eased to 3.5% from 3.9%, also as expected.
Capital Economics said: “With core inflation (3.5%) and services inflation (5.7%) in May still above that in the eurozone (2.9% and 4.1% respectively), we doubt the Bank will be ready to follow in the ECB’s footsteps and cut interest rates tomorrow.
“For now, we are sticking with our forecast that the Bank will first cut interest rates from 5.25% in August, although that relies on better news on services CPI inflation and wage growth in the coming months.”
In corporate news, Warhammer maker Games Workshop said it expected a jump in annual pre-tax profits to at least £200m compared to £171m a year earlier.
In a very brief trading update, the company said core revenue for the 53 weeks to June 2 would be at least £490m, up £45m year on year and licensing income of £30m versus £25m in 2022/23.
Vodafone Group confirmed several days of speculation as it announced the sale of 484.7 million shares, or 18%, of Indus Towers, through an accelerated bookbuild.
The FTSE 100 company said the sale raised INR 153bn (€1.7 billion), which would be used to repay its existing bank borrowings of €1.8bn related to its Indian assets. Post-transaction, Vodafone retained a 3.1% shareholding in Indus Towers, amounting to 82.5 million shares.
Precision instrumentation and controls group Spectris said full-year profits will be at the bottom end of market forecasts as a result of weaker-than-expected demand at its lab equipment division in the first half.
The news came as the company announced the appointment of Royal Mail’s chief financial officer Angela Noon as its new CFO.
