(Reuters) – The UK’s FTSE 100 edged up on Wednesday after a reading on inflation came in slightly below expectations, offering comfort to investors ahead of Finance Minister Rachel Reeves’ budget update later in the day.
The blue-chip FTSE 100 rose 0.1% as of 1017 GMT, while the midcap FTSE 250 index climbed 0.5%.
British inflation slowed by more than expected in February, bringing some relief to consumers ahead of a likely new pick-up in price growth and to Reeves before her speech scheduled for 1230 GMT.
Sterling weakened slightly following the inflation data release.
Economists warned that rising energy prices will push inflation up again soon.
Reeves is expected to announce cuts to her spending plans in a bid to reassure investors that she can be trusted to fix the public finances as growth falters.
With borrowing costs rising and growth forecasts slashed, Reeves aims to demonstrate fiscal discipline while still funding priorities like defense.
The energy sector continued driving gains for a second consecutive session, with North Sea oil and gas group Ithaca Energy rising 8.2% after announcing restructuring plans.
Liquefied natural gas trader Shell was among the top gainers on the blue-chip index, up 1.6%.
Online supermarket and technology firm Ocado Group led gains in the midcap index, surging 15.2%, after J.P.Morgan upgraded its rating to “overweight” from “neutral”.
Food manufacturer Bakkavor rose 4.2% after a report that it was considering an increased bid from rival Greencore.
On the flipside, Vistry dropped 5.2% after the homebuilder did not pay a final dividend and said it would look to save about 200 million pounds ($258.1 million) this year after its annual profit slumped 35%.
Engineering firm Smiths Group fell 2% after HSBC cut its price target on the stock.
(Reporting by Ragini Mathur in Bengaluru; Editing by Shailesh Kuber)
