Britain’s FTSE 100 achieved a new record close on Wednesday, with consumer-related stocks leading the gains. Investors absorbed an inflation report that dampened hopes for a near-term Bank of England rate cut.
The blue-chip index FTSE 100 closed 1% higher, surpassing the intraday record levels it reached on Friday. Meanwhile, the more domestically focused FTSE midcap index posted a modest rise of 0.2%.
Both benchmark indexes erased earlier losses incurred during the session.
Official data revealed that the UK’s consumer price inflation hit its highest in 18 months in July, increasing to 3.8% in the fastest annual rise for a Group of Seven economy, approaching the BoE’s forecast of a 4% peak in September.
The data further tempered the already low expectations of a rate cut by the British central bank, with traders now betting on a quarter-point reduction in March next year. Earlier this month, markets had anticipated a cut before the end of 2025.
The inflation report’s interest rate implications led to a 0.2% dip in homebuilders due to concerns about mortgage affordability.
The aerospace and defense index faced pressure for a second consecutive day, falling 1.7% after marking its largest single-day decline since early April on Tuesday.
Consumer stocks drove the gains on the FTSE 100, with Unilever, Reckitt, and Tesco rising between 1.2% and 3.2%. The healthcare sector increased by 1.8%.
Financials contributed to the advances, with banks and non-life insurers advancing 1.4% and 1.7% respectively.
Utilities saw a 1.9% increase, with water provider United Utilities gaining 3.5% after Barclays upgraded its stock rating to “Overweight” from “Equal Weight.”
Among individual movers, Ithaca Energy surged 10.4% to its highest in nearly three years after the oil and gas company raised its 2025 production forecast.
Medical equipment maker Convatec rose 5.6%, posting its best day since March this year, after announcing a $300 million share buyback program.
