Published by Jessica Weisman-Pitts
Posted on November 13, 2024
2 min readLast updated: January 28, 2026
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By Sruthi Shankar
(Reuters) – The main UK stock indexes slipped on Wednesday as traders awaited key U.S. inflation data to gauge the path of monetary policy, while defence company Smiths Group rallied to record highs after upgrading its revenue outlook.
The blue-chip FTSE 100 was down 0.1% at 1146 GMT, while the FTSE 250 index of midcap companies dipped 0.2%.
Global stocks were sluggish ahead of the U.S. inflation data at 1330 GMT, which is expected to show that core consumer prices held steady in October. Traders are currently pricing a 59% chance of a 25 bps rate cut by the Federal Reserve in December.
“The consensus is for the annual rate of inflation to move from 2.4% to 2.6%. Any higher could trouble the market, particularly given the incoming Trump administration raising the prospect of higher inflation through various policies,” said Russ Mould, investment director at AJ Bell.
UK and European markets have fluctuated since Donald Trump’s re-election as U.S. president, as investors fretted over the possibility of a trade war hurting the European economy and disappointment over China’s stimulus steps.
Meanwhile, still high inflation in Britain poses a risk that some drivers of price growth could be heading upwards, Bank of England interest rate-setter Catherine Mann said.
The BoE last week cut borrowing costs for only the second time since 2020 and said further reductions were likely to be gradual as it assessed the persistence of inflation pressures.
Smiths Group rallied 10%, having touched a record high earlier, after the British engineering firm upgraded its annual organic revenue outlook following strong demand for its next-generation scanning and explosives detectors.
Babcock jumped 5.9% after the defence group said it was on track to meet forecasts for the full year as the backdrop of geopolitical instability drives demand for its defence equipment and services.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Vijay Kishore)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or the Producer Price Index (PPI).
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange by market capitalization. It is a key indicator of the performance of the UK stock market.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
A rate cut is a reduction in the interest rate set by a central bank. It is typically used to stimulate economic growth by making borrowing cheaper, encouraging spending and investment.
Corporate bonds are debt securities issued by companies to raise capital. Investors who purchase these bonds are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value at maturity.
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