London midday: Stocks turn higher as housebuilders rally; Fed eyed

(Sharecast News) - London stocks had turned positive by midday on Wednesday, underpinned by strength in the housebuilding sector after well-received results from Barratt, as investors digested UK inflation figures and looked ahead to an expected rate hike by the Federal Reserve.

The FTSE 100 was 0.6% higher at 10,722.84, while Brent crude was 1.1% lower at $107.56 a barrel and West Texas Intermediate was down 2% at $103.70.

Russ Mould, investment director at AJ Bell, said: "European and Asian stock markets enjoyed a solid bounce on Wednesday as investor sentiment picked up amid a pullback in the oil price."

Mould said the drop in the oil price provided "some much-needed relief to the market following an intense period that fired up inflation worries".

"The dip in the commodity price might not be enough to steer the Federal Reserve on a different path though. It is widely expected to raise interest rates today, with the first of potentially two or three hikes over the next six months," he added.

On home shores, figures from the Office for National Statistics showed that inflation rose in line with expectations in August amid higher fuel prices.

The consumer prices index ticked up to 3.1% year-on-year last month from 2.9% in July.

The ONS said transport, particularly motor fuels, made the largest upward contribution to the change in CPI. Fuel prices rose 23% in the 12 months to August, compared with a 15.5% increase the previous month.

On a monthly basis, CPI rose 0.5% in August, up from 0.3% in August 2025.

ONS chief economist Grant Fitzner said: "Sharp rises for petrol and diesel pushed inflation up again in August.

"Higher airfares, particularly for long-haul journeys, also contributed to the increase.

"Rising crude oil and petrol prices increased both the annual cost of raw materials and the price of goods leaving factories respectively."

The latest inflation reading came ahead of a policy announcement on Thursday from the Bank of England, which is widely expected to hold rates steady at 3.75%. Adam Deasy, economist at PwC UK, said the BoE has a difficult task, balancing a worsening external price shock against a domestic economy sending mixed signals.

"Oil prices are now above $100 a barrel, similar to the most adverse of the three scenarios the Bank of England set out in July; gas prices are currently exceeding that scenario's assumptions," he said. "But while inflationary pressures build, the UK's labour market continues to weaken, suggesting some areas of growing fragility in the economy. At the same time, July GDP has surprised to the upside.

"That leaves the Bank in wait-and-see mode, but with less room for comfort. Monetary policy won't shift the energy markets, nor the machinations of global geopolitics, but it may prevent inflation becoming embedded in wages and prices. That's what the Bank will be watching for and where it's probably too soon to say."

In equity markets, Barratt Redrow shot to the top of the FTSE 100 as it trimmed its guidance for FY27 home completions but reported a 5% jump in FY26 completions to 17,667 - towards the top of its guidance range - and said it had entered FY27 with a solid forward sales position. Peer Persimmon also gained, along with Taylor Wimpey and Bellway.

Defence firm Babcock gained as it said trading for the first five months of the fiscal year was in line with expectations, with strong Nuclear and Aviation performance and its fullyear outlook unchanged.

Pan African Resources advanced as the gold miner unveiled a record dividend and share buyback following a doubling of both revenues and profits, and forecast further production growth in the current financial year.

On the downside, online greeting cards and gifts retailer Moonpig slumped as it backed its outlook for FY27 and said trading had been in line with its expectations since the start of the year.

Russ Mould, investment director at AJ Bell, said: "Moonpig shares couldn't fly after its latest trading update failed to deliver any upgrades and highlighted the continuing drag on performance from the Experiences division.

"The share price pullback follows a strong showing for the stock in recent months after June's full-year results impressed, with the company's bumper cash flow allowing for generous share buybacks."

Market Movers

FTSE 100 (UKX) 10,722.84 0.61%

FTSE 250 (MCX) 23,970.03 0.64%

techMARK (TASX) 6,071.60 0.79%

FTSE 100 - Risers

Barratt Redrow (BTRW) 301.40p 9.15%

Persimmon (PSN) 1,147.00p 4.32%

Fresnillo (FRES) 2,974.00p 3.96%

Antofagasta (ANTO) 3,624.00p 3.51%

Babcock International Group (BAB) 1,023.00p 2.91%

NATWEST GROUP (NWG) 702.40p 2.39%

Standard Chartered (STAN) 2,312.00p 2.30%

Lloyds Banking Group (LLOY) 111.00p 2.07%

Barclays (BARC) 480.15p 2.03%

Anglo American (AAL) 3,936.00p 1.92%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 361.60p -3.59%

Convatec Group (CTEC) 214.40p -2.37%

JD Sports Fashion (JD.) 75.10p -2.11%

Sainsbury (J) (SBRY) 330.50p -1.90%

Tesco (TSCO) 473.30p -1.27%

Experian (EXPN) 2,780.00p -1.03%

Metlen Energy & Metals (MTLN) 46.25p -1.03%

London Stock Exchange Group (LSEG) 8,188.00p -1.02%

Informa (INF) 883.80p -1.01%

St James's Place (STJ) 1,102.00p -0.99%

FTSE 250 - Risers

Kier Group (KIE) 282.80p 10.02%

Pan African Resources (PAF) 123.30p 7.59%

Bellway (BWY) 2,046.00p 4.71%

Raspberry PI Holdings (RPI) 542.75p 4.58%

GB Group (GBG) 157.20p 4.24%

HGCapital Trust (HGT) 419.00p 4.10%

Hochschild Mining (HOC) 596.50p 3.74%

Taylor Wimpey (TW.) 79.04p 3.67%

Endeavour Mining (EDV) 4,578.00p 3.39%

Ceres Power Holdings (CWR) 370.20p 3.06%

FTSE 250 - Fallers

Frasers Group (FRAS) 746.50p -4.47%

Hansa Investment Company Limited (DI) (HAN) 326.00p -2.98%

Oxford Biomedica (OXB) 447.50p -2.93%

Hays (HAS) 64.15p -2.43%

Moonpig Group (MOON) 255.20p -2.30%

Utilico Emerging Markets Ltd (DI) (UEM) 276.00p -2.13%

Patria Private Equity Trust (PPET) 588.00p -1.67%

Barr (A.G.) (BAG) 593.00p -1.50%

Greggs (GRG) 1,729.00p -1.48%

Baltic Classifieds Group (BCG) 2.33p -1.36%