The UK’s FTSE 100 extended its losses to a fifth day, closing 0.47% lower on Wednesday, as the October inflation report raised the possibility of an interest rate cut in December.
Britain’s annual inflation rate fell to 3.6% in October from 3.8% in September, according to data from the Office for National Statistics. Analysts expected a 3.6% rate for the month.
“The cooling in underlying price pressures in October extends a string of soft UK economic data,” said Berenberg. “At the 6 November Bank of England (BoE) meeting the swing voter, Governor Andrew Bailey, said he was waiting to see if disinflation continued in “upcoming economic developments this year” before switching his vote from hold to cut. Slower wage growth and services price increases than the central bank anticipated since will likely convince him that it has. We therefore bring forward the next 25bp cut in our policy rate forecast to 17 December. Previously we thought the BoE would delay it until February 2026.”
Additionally, government data showed that UK retail prices rose 4.3% year over year in October, as expected, following a 4.5% increase in September. British house prices edged down 0.6% on average in September compared with the previous month. The house price index was up 2.6% on an annual basis, with the average property valued at 272,000 pounds sterling.
In corporate news, The Sage Group (SGE.L) zoomed up 1.21% after proposing a higher dividend with a yearly growth in fiscal 2025 profit and revenue. The British enterprise software company also launched an up to 300 million-pound share buyback program.
“Sage delivered another good performance in FY25,” said Chief Executive Officer Steve Hare. “Strong, broad-based revenue growth and significant margin expansion reflect our focus on strategic execution, our resilient business model, and continuing investment in our products, our platform and our people.”
