Early market roundup: FTSE 100 up as UK annual inflation rate slows

London’s blue chip index traded higher on Wednesday morning after UK inflation figures for January were mostly in line with expectations; meanwhile the FTSE 250 was down a notch.

The FTSE 100 index opened up 41.72 points, 0.4%, at 10,597.89. The FTSE 250 was down 5.16 points at 23,550.66, and the AIM all-share was up 1.69 points, 0.2%, at 808.30.

The Cboe UK 100 was up 0.8% at 10,58.09, the Cboe UK 250 was up 0.1% at 20,872.12, and the Cboe small companies was down marginally at 18,513.07.

BAE Systems led the FTSE 100, up 5.2%.

The defence contractor reported sales of £28.34 billion for 2025, up 10% on-year, while pretax profit rose to £2.57 billion from £2.33 billion.

BAE increased its total dividend by 10% to 36.3p per share, and its 2026 guidance includes sales rising by between 7% and 9%.

Glencore was the second-highest, up 2.6% after reporting its 2025 results.

The commodity trading and mining company posted net attributable income of $363 million in 2025, flipped from a loss $1.63 billion in 2024. Revenue for the year was $247.54 billion, up 7.2% and higher than the increase of 1.9% to $235.3 billion expected by First National Bank.

Glencore declared a base dividend of 10 US cents per share, and topped it up with 7 cents from the July merger between its former agriculture investment Viterra and New York-listed Bunge Global.

Other defence and mining stocks also rose. Antofagasta was the third-highest stock, up 2.4%. Other winners included Rolls-Royce, up 1.7%, Babcock, up 1.8%, and Anglo American, up 1.6%.

Trellus Health surged 41%.

The healthcare company announced a six-month contract extension with Johnson & Johnson Health Care Systems to continue promoting its Trellus Elevate platform for patients with moderate-to-severely active inflammatory bowel disease.

UK consumer and producer output price inflation slowed on an annual basis, the Office for National Statistics reported.

On a monthly basis in January, the consumer price index showed a 0.5% decline, in line with FXStreet-cited consensus and flipping from a 0.4% rise in December. Annually, consumer prices rose 3.0% as expected, slowing from a 3.4% rise.

Notably, the annual inflation rate for food and non-alcoholic beverages decelerated to 3.6% in January from 4.5% in December.

Input producer prices decreased 0.2% on-year compared with December’s revised 0.5% increase, and output prices climbed 2.5%, slowing from a revised 3.1% increase.

Retail prices rose 3.8% annually, below the consensus of a 3.9% rise, and slowed from a 4.2% increase.

In European equities on Wednesday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.5%.

The Financial Times reported that Christine Lagarde will leave the European Central Bank before her eight-year term as president ends in October 2027, citing ‘a person familiar with her thinking’.

The newspaper said Lagarde wants to step down before the French presidential election in April next year. This will allow outgoing French President Emmanuel Macron, together with German Chancellor Friedrich Merz, to find a new head, according to the FT’s source.

Later, an ECB spokesperson said: ‘President Lagarde is totally focused on her mission and has not taken any decision regarding the end of her term.’

Consumer price inflation in France decelerated last month in line with provisional figures, data published by the National Institute of Statistics & Economic Studies showed.

The annual inflation rate as measured by the consumer price index slowed to 0.3% in January from 0.8% in December. On a harmonised basis, allowing for EU-wide comparison, France’s annual CPI inflation rate decelerated to 0.4% in January from 0.7% in December.

The pound was quoted higher at $1.3564 early on Wednesday in London, compared to $1.3531 at the equities close on Tuesday. The euro stood flat at $1.1830. Against the yen, the dollar was trading at JP¥153.75 compared to JP¥153.61.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 1.0%. The S&P/ASX 200 in Sydney closed up 0.5%.

In China and Hong Kong, markets are closed for the Lunar New Year.

In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.1%, the S&P 500 up 0.1% and the Nasdaq Composite up 0.1%.

The yield on the US 10-year Treasury was quoted at 4.08%, widening from 4.05%. The yield on the US 30-year Treasury was quoted at 4.70%, widening from 4.68%.

Brent oil was quoted higher at $67.73 a barrel early in London on Wednesday, from $67.17 late Tuesday.

Gold was quoted higher at $4,919.30 an ounce, against $4,882.00.

Still to come on Wednesday’s economic calendar, there are several US releases including building permits, industrial production and durable goods orders.

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