London open: FTSE dips as investors mull UK inflation, ahead of Fed announcement

16th Sep 2026 07:45

(Sharecast News) - London stocks dipped in early trade on Wednesday as investors mulled the latest UK inflation figures and looked ahead to an expected rate hike by the Federal Reserve.

At 0835 BST, the FTSE 100 was 0.4% weaker at 10,696.70, while Brent crude was 0.9% lower at $107.74 a barrel and West Texas Intermediate was down 1.5% at $105.27.

Figures released earlier by the Office for National Statistics showed that inflation rose in line with expectations in August amid higher fuel prices.

The consumer prices index ticked up to 3.1% year-on-year last month from 2.9% in July. The ONS said transport, particularly motor fuels, made the largest upward contribution to the change in CPI. Fuel prices rose 23% in the 12 months to August, compared with a 15.5% increase the previous month.

On a monthly basis, CPI rose 0.5% in August, up from 0.3% in August 2025.

ONS chief economist Grant Fitzner said: "Sharp rises for petrol and diesel pushed inflation up again in August.

"Higher airfares, particularly for long-haul journeys, also contributed to the increase.

"Rising crude oil and petrol prices increased both the annual cost of raw materials and the price of goods leaving factories respectively."

The inflation reading came ahead of a policy announcement on Thursday from the Bank of England, which is widely expected to hold rates steady at 3.75%.

Adam Deasy, economist at PwC UK, said the BoE has a difficult task, balancing a worsening external price shock against a domestic economy sending mixed signals.

"Oil prices are now above $100 a barrel, similar to the most adverse of the three scenarios the Bank of England set out in July; gas prices are currently exceeding that scenario's assumptions," he said. "But while inflationary pressures build, the UK's labour market continues to weaken, suggesting some areas of growing fragility in the economy. At the same time, July GDP has surprised to the upside.

"That leaves the Bank in wait-and-see mode, but with less room for comfort. Monetary policy won't shift the energy markets, nor the machinations of global geopolitics, but it may prevent inflation becoming embedded in wages and prices. That's what the Bank will be watching for and where it's probably too soon to say."

Looking to the rest of the day, attention will turn to the Fed policy announcement due after the close of European markets, amid expectations of a 25 basis points rate hike.

Susannah Streeter, chief investment strategist at Wealth Club, said: "The feeling is that the Fed won't be able to sit on its hands, and now an increase is widely expected - with a 92.4% chance of at least a 25-basis-point U.S. rate hike today being factored in. The big question is how high could they go - with multiple hikes now expected over the next year."

In equity markets, Barratt Redrow shot to the top of the FTSE 100 as it trimmed its guidance for FY27 home completions but also said it had entered FY27 with a solid forward sales position. Peer Persimmon also gained, along with Taylor Wimpey and Bellway.

Games Workshop rose as it declared a 70p per share dividend, while defence firm Babcock rallied as it said trading for the first five months of the fiscal year was in line with expectations, with strong Nuclear and Aviation performance and its full‑year outlook unchanged.

On the downside, online greeting cards and gifts retailer Moonpig slumped as it backed its outlook for FY27 and said trading had been in line with its expectations since the start of the year.

Market Movers

FTSE 100 (UKX) 10,696.70 0.36%

FTSE 250 (MCX) 23,901.40 0.35%

techMARK (TASX) 6,020.83 -0.05%

FTSE 100 - Risers

Barratt Redrow (BTRW) 294.40p 6.80%

Antofagasta (ANTO) 3,600.00p 3.08%

Persimmon (PSN) 1,130.50p 2.87%

Fresnillo (FRES) 2,933.00p 2.66%

Games Workshop Group (GAW) 18,110.00p 2.32%

Standard Chartered (STAN) 2,307.00p 2.26%

NATWEST GROUP (NWG) 701.60p 2.07%

Anglo American (AAL) 3,938.00p 2.05%

Babcock International Group (BAB) 1,013.00p 1.90%

Lloyds Banking Group (LLOY) 110.75p 1.79%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 362.10p -3.70%

Sainsbury (J) (SBRY) 331.00p -1.78%

Entain (ENT) 491.80p -1.76%

Burberry Group (BRBY) 968.00p -1.50%

JD Sports Fashion (JD.) 75.62p -1.46%

Next (NXT) 14,555.00p -1.42%

London Stock Exchange Group (LSEG) 8,132.00p -1.28%

Vodafone Group (VOD) 129.60p -1.26%

Tesco (TSCO) 473.60p -1.25%

Unilever (ULVR) 4,582.00p -1.21%

FTSE 250 - Risers

Kier Group (KIE) 272.80p 5.90%

Pan African Resources (PAF) 120.10p 4.45%

Hochschild Mining (HOC) 595.00p 3.39%

Trustpilot Group (TRST) 218.60p 3.32%

Vistry Group (VTY) 275.60p 2.99%

Taylor Wimpey (TW.) 78.50p 2.88%

Bellway (BWY) 2,012.00p 2.87%

Endeavour Mining (EDV) 4,550.00p 2.66%

Man Group (EMG) 315.40p 2.53%

Johnson Service Group (JSG) 136.20p 2.41%

FTSE 250 - Fallers

Moonpig Group (MOON) 246.20p -5.44%

Frasers Group (FRAS) 760.50p -2.94%

Hays (HAS) 63.95p -2.74%

Utilico Emerging Markets Ltd (DI) (UEM) 276.00p -2.13%

B&M European Value Retail (BME) 227.00p -1.91%

Diversified Energy Company (DI) (DEC) 1,110.00p -1.62%

Michael Page (PAGE) 207.80p -1.33%

Hilton Food Group (HFG) 669.00p -1.33%

Auction Technology Group (ATG) 429.80p -1.24%

Pets at Home Group (PETS) 206.20p -1.15%