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FTSE 100 flat, FTSE 250 down 0.7%
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UK inflation rockets in April
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JD Sports falls after warning of higher prices
May 21 (Reuters) - Britain's blue-chip index closed flat on Wednesday, while mid-caps registered losses, as investors assessed the country's hotter-than-expected inflation data and a mixed bag of corporate earnings.
Britain suffered a bigger-than-expected inflation surge in April, prompting investors to bet on the Bank of England slowing its already gradual pace of interest rate cuts.
The blue-chip FTSE 100 was nearly flat with a 0.06% gain, while the midcap FTSE 250 fell 0.7%, as the inflation data triggered a slight wobble on the more domestically-focused index.
"Today's data should put paid to the possibility of another UK rate cut for a few months, and will likely encourage the Bank of England to maintain its hawkish policy guidance for some time yet," said Matthew Ryan, Head of Market Strategy at Ebury.
The chance of a BoE rate cut in August was cut to 40% by investors, down from 60% before the inflation data.
Sterling reached its highest intraday gain in three years against the U.S. dollar following the publication of the figures, but the peak was short-lived. Separately, data showed British house prices also rose at their fastest pace since the end of 2022 in the 12 months to March.
Among blue-chips, sportswear retailer JD Sports' shares were the worst hit, dropping 10.6% after it warned that President Donald Trump's tariffs may force the company to hike prices in the key market.
SSE fell 2.4% after the renewable energy generator cut its five-year investment plans by 15%.
Keeping losses in check, precious metal miners gained 3% as gold prices rose for a third straight session and hit a one-week high.
Fresnillo gained the most in the FTSE 100 with 4.2% rise.
Aerospace and defence sub-index rose 1%, tracking gains in U.S. and European peers following Trump's unveiling of plans for a ‘Golden Dome’ missile system.
Water utility Severn Trent shares gained 2.3% after it projected a doubling of adjusted earnings per share between 2025 to 2028. (Reporting by Sanchayaita Roy, Ragini Mathur and Twesha Dikshit; Additional reporting by Rashika Singh; Editing by Leroy Leo, Alexandra Hudson)
