London pre-open: Stocks to edge up; UK inflation rises more than expected

(Sharecast News) - London stocks were set to edge up at the open on Wednesday as investors mulled a bigger-than-expected rise in UK inflation.

The FTSE 100 was called to open around 15 points higher.

Figures from the Office for National Statistics showed that inflation soared to the highest annual rate in almost a year last month, as transport costs spiked.

The consumer price index rose by 3.5% in the 12 months to September, up from 3.1% in August. It was also higher than the 3.4% forecast.

The largest upward contribution came from transport, particularly motor fuels, with prices in the segment jumping 6.6%. The average price of petrol rose to 169.5p a litre, the highest since August 2022, while the cost of diesel was the steepest since July 2022.

Core CPI, which strips out more volatile energy, food, alcohol and tobacco prices, rose by 2.8%, up from 2.5% in August.

Martin Sartorius, lead economist at the Confederation of British Industry, said: "Inflation ramped up in September, supported by a further rise in fuel pump prices. We expect that inflation will continue to accelerate in the months ahead due to higher energy costs and some firming in broader price pressures.

"September's rise in inflation means that a rate hike will remain firmly on the table at the Monetary Policy Committee's next meeting. While there have been limited signs of higher energy costs feeding into domestic price pressures so far, the Committee will likely want to guard against the risk of persistently higher headline inflation becoming embedded in future wage and price-setting behaviour."

In corporate news, real estate investment trust Segro said trading remained strong through the first nine months of the year, with rent growth, high occupancy and progress across its development pipeline all supporting earnings.

Segro has contracted £70m of new headline rent yeartodate, up 32% on the prior period, driven by £42m from its existing portfolio and £28m from development lettings. UK rent reviews, renewals and regears delivered an average 43% uplift, helping Segro continue to capture embedded marktomarket potential. Occupancy edged up to 94.7%, with customer retention at 80%.

Great Portland Estates said it had committed to the redevelopment of its Soho Square Estate, in London's West End.

The 90,000 sq ft development will include 75,000 sq ft of offices and 15,000 sq ft of retail space fronting Oxford Street, near the Tottenham Court Road tube station.

Elsewhere, Halfords backed its full-year profit expectations as the provider of motoring and cycling products and services hailed "strong" trading in the first half.

In the 26 weeks to 2 October, group like-for-like sales rose 7.1%, with sales in the retail segment up 7.7%, while motoring and cycling saw increases of 7.3% and 8.3%, respectively. LFL sales at Autocentres grew 6.1%.