On Wednesday, U.K. stocks experienced a decline, while the British pound gained strength against other major currencies. This shift occurred after reports indicated that U.K. consumer price inflation did not decelerate as much as expected in April, casting doubt on a potential rate cut in June.
Data from the Office for National Statistics revealed that U.K. consumer price inflation had weakened to its lowest level since July 2021. Consumer prices increased by 2.3% year-on-year in April, a slower rise compared to the 3.2% observed in March. Nonetheless, this inflation rate surpassed economists' predictions of 2.1%.
Separate data sets highlighted that output price inflation hit its highest point since May 2023, while input prices dropped for the eleventh straight month in April. Meanwhile, public sector net borrowing rose to GBP 20.5 billion in April, marking the fourth-highest April borrowing figure since monthly records began in 1993, according to the Office for National Statistics.
The FTSE 100 benchmark index fell by 27 points, or 0.3%, settling at 8,389, after a slight decline observed on Tuesday.
RS Group, a provider of industrial and electrical products, saw a 4.2% drop following a 25% fall in underlying annual profits. Marks & Spencer, however, surged by 8.3% as the retailer announced its first dividend since 2019, reporting its highest profit in over a decade. British Land also saw a rise of about 2% after divesting its stake in Sheffield's Meadowhall shopping center for £360 million.
