UK's FTSE 100 ticks higher on energy boost; hot inflation report limits gains

By Reuters News

Oct 21 (Reuters) - Britain's FTSE 100 edged higher on Wednesday, supported by gains in oil majors and financial stocks, though hotter-than-expected inflation reinforced expectations of a Bank of England interest rate hike, limiting the index's upside.

The blue-chip FTSE 100 index .FTSE rose 0.1% to 10,752.88 points, after two sessions of declines in a row. The midcap FTSE 250 .FTMC was up 0.3%.

  • UK inflation rose to 3.5% in September, above economists' expectations of 3.4%, as the US-Israeli war on Iran pushed up energy prices

  • Money markets are near certain of a 25-basis-point BoE rate hike in November, according to LSEG data

  • Finance Minister John Healey came under pressure ahead of next week's budget after official data showed government borrowing exceeded forecasts for a second straight month, pushing public debt above £3 trillion ($4.01 trillion)

  • "Widespread expectations of relatively stable economic policy and a market-friendly budget limit the upside for the FTSE 100, particularly if such a budget were to manifest itself primarily in a stronger GBP," Duncan Toms, multi-asset strategist at HSBC, said in a note, reiterating a neutral stance on UK stocks

  • Energy giants gained, with BP BP.L and Shell SHEL.L among the biggest boosts to the FTSE 100

  • Britain approved the Jackdaw North Sea gas field, ending years of legal and political wrangling as the Labour government seeks to balance its climate goals with energy security concerns

  • Asset manager Aberdeen Group ABDN.L, among the top losers on the FTSE 100, fell 4% after flagging a slower-than-expected return to adviser-segment inflows

  • Midcaps: bicycles-to-car parts retailer Halfords HFD.L dropped about 8.6%, the steepest on the FTSE 250, after first-half results

https://www.reuters.com/graphics/AUTOMATED-202609/UK-INFLATION-YOY-3Y/znpngmemavl/chart.png

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