FTSE 100 slips as UK inflation holds ahead of BoE

London – The FTSE 100 fell 0.14% to 10,479.77 at 09:36 GMT on Wednesday as investors digested May inflation data ahead of the Bank of England policy announcement. The domestically focused FTSE 250 slipped 0.4%.

The Office for National Statistics reported the Consumer Prices Index rose 2.8% in the 12 months to May 2026, unchanged from April and below economists’ forecasts of 3.0%. The CPIH measure, which includes housing costs, grew 0.2% month-on-month in May, matching the rate recorded a year earlier.

Traders trimmed expectations for an interest-rate rise later in the year after the unchanged inflation reading ahead of the Bank of England decision.

Sector moves were mixed. Consumer staples underperformed, with British American Tobacco down 1.7%. Utilities led sector declines, falling 1.1%. Energy shares were pressured as oil traded below $80 a barrel; BP and Shell each lost about 0.7%.

Financial stocks provided pockets of support. Barclays rose 2% after BofA Global Research raised its price target for the bank. Standard Chartered added 1.3%, offsetting some broader market weakness.

The ONS said average UK house prices increased 3.8% in the year to April 2026, the strongest annual rise since March 2025. On a month-on-month basis, average prices rose 0.7% between March and April, reversing a 2.9% fall over the same months a year earlier. Property transactions remained significantly higher than a year earlier.

Homebuilder shares gained about 1.5% on the housing data. Recruitment firm Hays rose 1.5% after announcing the sale of its operations in six European countries.

Investors remained cautious ahead of the Bank of England policy announcement, which is expected to provide further guidance on the outlook for interest rates and the UK economy.