London’s top equity markets wobbled after inflation lifted to its highest level since March amid investor caution over key central bank votes.
UK Consumer Prices Index (CPI) inflation increased to 2.6% in November after a rise in petrol prices, the Office for National Statistics (ONS) said.
The figures reinforced predictions that Bank of England setters are set to vote to keep interest rates at 4.75% in their final vote of the year despite modest economic growth in recent months.
The FTSE 100 finished 3.91 points, or 0.05%, higher to end the day at 8,199.11.
In the US, attention was also turned to central bankers, with eyes firmly on the Federal Reserve’s latest rates decision on Wednesday evening.
The Dow Jones bounced back from recent weakness amid hopes its central bank could cut rates.
Chris Beauchamp, chief market analyst at IG, said: “Stock markets have found their footing after a mixed morning, but all eyes are on the Fed meeting tonight and the accompanying statement.
“The first half of the month has seen US markets struggle, but there is still plenty of space for the usual second half rally to develop, should we avoid any nasty surprises from Powell and co tonight.”
In mainland Europe, the other main markets also made marginal gains despite some weak earnings updates.
The Cac 40 ended 0.26% higher for the day and the Dax index was up 0.07%.
Meanwhile, sterling dipped slightly after increases in recent sessions.
The pound was down 0.11% at 1.269 US dollars but up 0.08% at 1.212 euros.
In company news, Shoe Zone shares took a kicking on Wednesday after the retail firm warned over profits once again and said it has shut stores in response to soaring wage costs following the recent Budget measures.
The company said it has seen “very challenging trading conditions” since the end of September as shoppers have pulled back spending amid unseasonal weather, adding that consumer confidence had weakened further since the Budget.
Its shares plunged by 38.6% to 85p as a result.
Elsewhere, Yorkshire Post owner National World made gains after agreeing a £65.1 million takeover by its largest shareholder, Media Concierge.
National World has given its backing to an all-cash offer worth 23p a share from the investor, which owns a 28% stake in the business.
National World finished the day up 5.7% at 22.2p.
National Grid was in the red for the day despite revealing “unprecedented” plans to invest £35 billion in its electricity-transmission business over the five years to March 2031. Shares finished down 1.1% at 926.2p.
The price of oil rallied after support from a drop in crude inventories and hopes of more concrete signs of Chinese stimulus.
A barrel of Brent crude oil was up by 0.99% to 73.57 dollars (£57.93) as markets were closing in London.
The biggest risers on the FTSE 100 were Melrose Industries, up 15.6p to 553.6p, IAG, up 5.5p to 302.8p, British Land, up 6.4p to 363.8p, Airtel Africa, up 1.8p to 107.3p, and Ashtead, up 80p to 5,166p.
The biggest fallers on the FTSE 100 were Entain, down 20p to 732p, Beazley, down 13p to 818.5p, AstraZeneca, down 154p to 10,352p, Persimmon, down 17p to 1,222p, and Hiscox, down 15p to 1,104p.
