London pre-open: Stocks seen up as inflation unexpectedly falls

(Sharecast News) - London stocks were set to rise at the open on Wednesday following a mostly positive US session, as investors mulled the latest UK inflation reading. The FTSE 100 was called to open around 21 points higher.

Data released earlier by the Office for National Statistics showed that inflation unexpectedly fell in December after two months of increases.

Consumer price inflation rose 2.5%, down from 2.6% in November, and versus expectations for it to remain unchanged.

Meanwhile, core inflation - which excludes food and energy - declined to 3.2% from 3.5%, versus expectations for a smaller drop to 3.4%.

Services inflation eased to 4.4% in December from 5% the month before. Economists were expecting 4.8%.

ONS economist Grant Fitzner said: "Inflation eased very slightly as hotel prices dipped this month, but rose a year ago. The cost of tobacco was another downward driver, as prices increased by less than this time last year.

"This was partly offset by the cost of fuel and also second-hand cars, which saw their first annual growth since July 2023."

In corporate news, recruitment firm Hays said it expected interim pre-exceptional operating profit of £25m, towards the lower end of the consensus range amid subdued trading conditions as net fees fell 12% in the second quarter.

Group consultant headcount decreased by 2% in the quarter, mainly in the UK, and by 15% year-on-year.

Vistry Group said in an update that it expects an adjusted profit before tax of about £250m for the 2024 financial year, down from £419.1m in 2023, aligning with revised guidance, as total completions increased 7% to around 17,200 and adjusted revenues rose 9% to £4.4bn.

The housebuilder reported a net debt of £180m as a result of higher-than-expected finished stock and work in progress.

Looking ahead, Vistry said it was focused on its asset-light partnerships strategy, targeting improved profitability and cash generation in 2025 despite ongoing market uncertainties.