London stocks had fallen into the red by midday amid weakness in the mining sector, as investors mulled the latest UK inflation data.
The FTSE 100 was down 0.4% at 7,153.18.
Figures released earlier by the Office for National Statistics showed that inflation fell more than expected in July, easing pressure on the Bank of England.
Consumer price inflation declined to 2% from 2.5% in June, coming in in line with the BoE’s 2% target and below consensus expectations of 2.3%. This marked the first easing inflation since February.
Core inflation – which strips out food and energy – fell to 1.8% from 2.3%, coming in below consensus expectations of 2.0%.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “Inflation fell back in July across a broad range of goods and services, including clothing, which decreased with summer sales returning after the pandemic hit the sector last year. This was offset by a sharp rise in the price of second-hand cars amidst increased demand, following a shortage of new models.
“The differing patterns of movement restrictions across the last two years have affected headline inflation. Some of this month’s fall came from products and services, such as foreign travel, where real prices were used last year but have had to be imputed this year.”
Ruth Gregory, senior UK economist at Capital Economics, said: “July’s drop in CPI inflation is likely to be followed by sharp rises in the next few months, taking inflation to a peak of about 4.5%.
“But provided higher inflation does not feed through into higher inflation expectations or persistently faster pay growth, we do not think that the Bank of England will respond next year by tightening monetary policy.”
In equity markets, miners were the biggest drag, with BHP, Antofagasta, Rio, Anglo American and Glencore all weaker.
Balfour Beatty lost ground even as the infrastructure group swung to profit and reinstated its dividend as it announced a withdrawal from fixed-price residential projects in London.
On the upside, housebuilder Persimmon reversed earlier gains to trade up as it said interim profits surged on the back of increased demand and government support measures as Covid curbs were eased.
Silver and gold miner Hochschild shone after reporting a jump in first-half profit and revenue as total group production was significantly higher versus the Covid-19 impacted first half of 2020.
Payments company Network International rose to the top of the FTSE 250 after saying it swung to an interim profit and backing its full-year profit expectations.
Redrow was also a high riser after Betaville reported that a predator was circling the housebuilder.
Market Movers
FTSE 100 (UKX) 7,153.18 -0.39%
FTSE 250 (MCX) 23,769.17 0.32%
techMARK (TASX) 4,815.01 0.28%
FTSE 100 – Risers
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,534.00p 3.55%
Ocado Group (OCDO) 1,872.00p 1.46%
Ashtead Group (AHT) 5,686.00p 1.43%
Auto Trader Group (AUTO) 644.00p 1.29%
Rightmove (RMV) 705.80p 1.23%
Barratt Developments (BDEV) 714.20p 1.22%
Vodafone Group (VOD) 121.76p 1.13%
Taylor Wimpey (TW.) 174.80p 1.13%
Aveva Group (AVV) 4,092.00p 1.04%
Weir Group (WEIR) 1,638.00p 0.92%
FTSE 100 – Fallers
BHP Group (BHP) 2,239.50p -5.03%
Evraz (EVR) 556.80p -2.66%
Antofagasta (ANTO) 1,477.00p -2.38%
Rio Tinto (RIO) 5,350.00p -2.35%
Anglo American (AAL) 3,246.00p -1.89%
Glencore (GLEN) 318.70p -1.80%
Burberry Group (BRBY) 2,008.00p -1.57%
Prudential (PRU) 1,448.50p -1.56%
Lloyds Banking Group (LLOY) 44.39p -1.33%
Legal & General Group (LGEN) 264.80p -1.19%
FTSE 250 – Risers
Network International Holdings (NETW) 382.20p 8.39%
Redrow (RDW) 676.80p 5.45%
Future (FUTR) 3,858.00p 4.27%
Indivior (INDV) 185.90p 4.15%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,534.00p 3.55%
Capita (CPI) 49.29p 2.69%
Ibstock (IBST) 224.80p 2.65%
Hochschild Mining (HOC) 155.30p 2.51%
Trustpilot Group (TRST) 392.80p 2.29%
OSB Group (OSB) 490.80p 2.21%
FTSE 250 – Fallers
Balfour Beatty (BBY) 296.00p -7.21%
Wizz Air Holdings (WIZZ) 4,824.00p -1.97%
Biffa (BIFF) 378.50p -1.94%
Syncona Limited NPV (SYNC) 197.80p -1.84%
TUI AG Reg Shs (DI) (TUI) 307.00p -1.82%
Just Group (JUST) 90.90p -1.78%
Mediclinic International (MDC) 286.00p -1.72%
BlackRock World Mining Trust (BRWM) 591.00p -1.50%
Investec (INVP) 280.30p -1.37%
Mitchells & Butlers (MAB) 282.60p -1.19%
