Last checked at 
(Alliance News) - Stock prices in London were trading sideways at midday on Wednesday as investors mulled the future of interest rates in the UK, following fresh data that revealed inflation cooled in January.
The FTSE 100 index was just 3.21 points higher at 7,956.98. The FTSE 250 was up 34.32 points, or 0.2%, at 20,052.55. The AIM All-Share was down 0.01 of a point at 867.25.
The Cboe UK 100 was down 0.1% at 867.25, the Cboe UK 250 was flat at 17,473.34, and the Cboe Small Companies was down 0.1% at 13,947.69.
Inflation in the UK slowed by slightly more than forecast in January, though remained in double digits, figures from the Office for National Statistics showed.
On an annual basis, the consumer price index eased to 10.1% in January from 10.5% in December. Consensus had expected inflation to cool to 10.3%, according to FXStreet.
Core inflation - excluding energy, food, alcohol, and tobacco - cooled to 5.8% in January on an annual basis, from 6.3% in December.
"With UK consumer prices showing signs of stabilization, especially core prices, which reflect domestic dynamics and exclude energy and food imports, the BoE is more likely to bring forward the [relaxation] of its monetary policy. At least this is what investors believe," said Ricardo Evangelista, senior analyst at ActivTrades.
James Smith, developed markets economist at ING, said he is still pencilling in a 25 basis hike next month at the Bank of England's next monetary policy meeting "for the time being".
"But," he added, "if this trend in services inflation persists, then it would be a strong argument in favour of pausing in May."
The pound was quoted at USD1.2075 at midday on Wednesday in London, lower compared to USD1.2174 at the close on Tuesday.
Russ Mould, investment director at AJ Bell said the "divergence in inflation figures" on either side of the Atlantic" resulted in weakness for the pound.
US consumer price inflation slowed in January, according to the latest data from the US Bureau of Labor Statistics on Tuesday.
Annually, consumer price inflation stood at 6.4%, easing slightly from 6.5% in December. The figure came above market consensus, as cited by FXStreet, which expected inflation to slow to 6.2%.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.4%.
US retail sales figures will be closely watched at 1330 GMT to provide a fuller picture of the nation's economy.
"The US is a nation of shoppers and this is the main gauge of consumer spending which accounts for most of the economic activity in the world’s largest economy," said Mould.
In London, Barclays remained the worst blue-chip performer at midday, plunging 10%.
The bank reported a fall in annual profit as a result of credit impairments, citing a "deteriorating macroeconomic forecast".
Barclays posted pretax profit of GBP7.01 billion, down 14% from GBP8.19 billion the previous year. It booked credit impairment charges of GBP1.22 billion in the year, compared to credit impairment releases of GBP653 million in 2021.
The charges reflected economic forecasts, Barclays said, and a gradual increase in delinquencies, partially offset by the "utilisation of macroeconomic uncertainty [post-model adjustments] and the release of Covid-19 related adjustments informed by refreshed scenarios".
Hargreaves Lansdown dropped 5.7% as it reported a fall in managed assets over the course of its financial first half, though profit surged 31%.
The retail investment platform reported that revenue in the six months ended December 31 jumped 20% to GBP350.0 million from GBP291.1 million a year ago. Pretax profit surged 31% to GBP197.6 million from GBP151.2 million.
However, Hargreaves ended the six-month period with GBP127.1 billion in total assets under administration, sliding 10% from GBP141.2 billion at the same point the year prior.
In addition, the firm reported GBP1.6 billion in net new business inflows in the period, 30% behind the GBP2.3 billion recorded a year before.
Glencore fell 0.5% despite posting record profit in 2022 and announcing a boosted dividend.
The Anglo-Swiss commodity trading and mining company said pretax profit surged to USD22.88 billion in 2022 from USD7.38 billion in 2021. Revenue rose by 26% to USD255.98 billion from USD203.75 billion.
The "unprecedented developments" in global energy markets were material drivers for both its marketing and industrial businesses, lifting adjusted earnings before interest, tax, depreciation and amortisation to USD34.10 billion, up 60% from USD21.32 billion.
In the FTSE 250, Dunelm lost 0.1% as it backed its full-year guidance, despite reporting a 17% drop in profit.
In the six months ended December 31, Dunelm reported a 5.0% increase in total sales to GBP835.0 million from GBP795.6 million a year ago.
However, pretax profit for the soft furnishings retailer fell by 17% to GBP117.4 million from GBP140.8 million.
Dunelm said this fall was expected, reflecting impact of sale timing and strong post-pandemic demand in the prior year, as well as inflationary impacts.
Babcock climbed 1.0% after it said it has been awarded a GBP400 million six-year contract to manage and operate Skynet, the UK Ministry of Defence's military satellite communications system.
Elsewhere in London, Technology Minerals jumped 5.9% after it announced its 49%-owned battery recycling business, Recyclus Group Ltd, has been given a schedule five notice by the UK Environment Agency for the environmental licence application for its Lithium-ion recycling plant in Wolverhampton, England.
A schedule five notice is the final stage before a licence is determined which, if successful, will enable the plant to start recycling operations.
In European equities on Wednesday, the CAC 40 in Paris was up 1.1%, while the DAX 40 in Frankfurt was up 0.4%.
The euro stood at USD1.0716 midday on Wednesday, lower against USD1.0731 at the London equities close on Tuesday. Against the yen, the dollar was trading at JPY133.42, higher compared to JPY132.77.
Brent oil was quoted at USD84.83 a barrel at midday in London on Wednesday, down from USD85.67 late Tuesday. Gold was quoted at USD1,833.40 an ounce, sharply lower against USD1,852.49.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
