London pre-open: Stocks to rise ahead of Fed announcement; UK inflation as expected

(Sharecast News) - London stocks were set to gain at the open on Wednesday following losses in the previous session, as investors mulled the latest UK inflation figures and looked ahead to an expected rate hike by the Federal Reserve.

The FTSE 100 was called to open around 21 points higher. At 0725 BST, Brent crude was 0.6% lower at $108.08 a barrel and West Texas Intermediate was down 1.1% at $104.62.

Data released earlier by the Office for National Statistics showed that inflation rose in August, in line with expectations, 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.

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 from the Bank of England on Thursday.

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."

Looking to the rest of the day, attention will turn to the Fed policy announcement due after the close of European markets, amid expectations of a 25 basis points rate hike.

In corporate news, Babcock 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.

The defence group highlighted recent contract wins across Canada, France, the UK, Australia and Poland, alongside progress on nuclear support work and expanding energysecurity partnerships as countries ramp up military spending.

Housebuilder Barratt Redrow reported a solid full-year operational performance, delivering 17,667 home completions, up 5% on the prior year and near the top end of guidance, but said pre-tax profits had fallen year-on-year.

Barratt Redrow said adjusted operating profits before PPA effects edged 0.6% higher to £598.1m, while adjusted pre-tax profits fell 7.1% to £572.8m, and statutory profits before tax rose to £363.5m as Redrowrelated integration and PPA costs reduced.