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Highlights
FTSE 100 rises after UK inflation figures show slowdown in services
Central bank meetings in the US and UK draw close attention amid monetary policy expectations
LON:GSK and LON:AZN decline on tariff remarks; LON:AO. under pressure despite growth
The FTSE 100 index moved higher in early trading following new economic data indicating a slowdown in UK inflation, particularly within the services sector. This trend aligned with forecasts from the Bank of England ahead of its upcoming policy meeting. The FTSE 350 remained steady, while the mid-cap segment saw little change as traders maintained a cautious stance.
The easing of services price inflation, viewed as a critical component by the central bank, offered room for policy recalibration. Market participants are closely watching the Bank of England's Monetary Policy Committee meeting, where the base rate is expected to remain steady. However, the deceleration in inflation metrics adds momentum to discussions surrounding future adjustments.
Sector performance impacted by geopolitical and tariff tensions
Global uncertainty stemming from ongoing Middle East tensions, specifically the conflict involving Iran and Israel, influenced overall sentiment. Concerns rose further as geopolitical statements pointed toward increased involvement by the United States. Despite this backdrop, energy-linked stocks helped support the FTSE, due to its strong weighting in oil and commodities.
Within healthcare, biotechnology and pharmaceutical groups faced downside pressure. Shares of (LON:GSK) and (LON:AZN) were weaker after remarks from US leadership indicated an intention to impose tariffs on pharmaceutical goods. The development weighed on sector sentiment, particularly for firms with significant international exposure.
Retailers and consumer stocks under pressure
Retail-linked equities also experienced declines. The personal goods category was broadly lower with (LON:BRBY), (LON:DOCS), and (LON:MOON) among the notable fallers in the mid-cap space. Taking and broader market caution appeared to drive the movement, especially as consumer discretionary names respond sensitively to inflation and rate outlooks.
(LON:AO)., an electronics and appliance retailer, posted a rise in annual but saw its shares pull back. Despite the earnings uptick, the stock faced selling activity, reflecting market hesitation amid global economic and policy shifts.
Upcoming central bank decisions remain in focus
Investors are now turning their attention to major central bank announcements. The US Federal Reserve’s policy outcome is anticipated later in the day, with analysts parsing every detail to interpret the stance on future interest rate moves. The Bank of England decision follows shortly after, with recent inflation data bringing fresh dynamics to the table.
Additional economic figures showed slower growth in UK house prices for April, adding to the overall narrative of a moderating inflation environment. This development has implications for interest rate sensitivity, especially in housing and mortgage-linked sectors.
For dividend-focused market watchers, certain FTSE firms continue to appear on FTSE Dividend Yield Scan tools, though broader market momentum remains tied to global policy and geopolitical events in the short term.
