London equities opened modestly higher on Wednesday after fresh data showed UK inflation slowed in January, strengthening expectations that the Bank of England could deliver interest rate cuts in both March and June. Sterling also steadied, clawing back some losses after a sharp drop in the previous session.
By 0806 GMT, the benchmark FTSE 100 was up 0.4%. The pound edged 0.01% higher against the dollar to 1.3560, recovering following Tuesday’s slide triggered by weaker labour market figures.
Elsewhere in Europe, Germany’s DAX gained 0.5%, while France’s CAC 40 advanced 0.3%.
UK roundup
Official figures showed Britain’s annual inflation rate cooled to 3.0% in January from 3.4% in December, bolstering the case for a rate reduction at the Bank of England’s next policy meeting in March. December’s reading had ticked up from 3.2% in November, marking the first increase in five months.
On a monthly basis, consumer prices fell 0.5%, reversing a 0.4% rise in December. Core CPI, which excludes volatile food and energy costs, declined 0.6% month over month and eased to 3.1% year on year from 3.2% previously.
ING’s UK economist James Smith described the inflation data as “a bit of a mixed bag,” noting that while food inflation is down sharply, services inflation remains stickier. Smith added that “the real action will come in April” when headline and services inflation figures could make the Bank “more comfortable with the inflation outlook.”
Corporate focus
Shares of BAE Systems (LSE:BA.) were in focus after the defence group lifted its dividend following record order intake, driven by higher military spending across Europe and the United States.
The company proposed a final dividend of 22.8 pence, taking the full-year payout to 36.3 pence, a 10% increase. It also bought back 30 million shares during the year at a cost of £502 million.
Meanwhile, Glencore (LSE:GLEN) posted a 6% drop in full-year core earnings, as strength in copper prices failed to offset weaker profitability in its coal division. Adjusted EBITDA came in at $13.5 billion, while revenue rose 7% to $247.5 billion. Adjusted EBIT fell 14% to $6 billion, and earnings per share were $0.03.
Separately, YouGov Plc (LSE:YOU) confirmed the appointment of Ian Griffiths as permanent chair. Griffiths, who joined the board in September 2025, succeeds Deborah Davis, who had served in the role on an interim basis since February 2025.
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