British stocks edged higher at the open on Wednesday after inflation data showed UK price pressures cooled in January, reinforcing expectations of Bank of England rate cuts in March and June, while the pound recovered some strength after falling sharply the previous day.
As of 0806 GMT, the blue-chip FTSE 100 rose 0.4%, while the British GBP/USD gained 0.01% against the dollar to 1.3560, rebounding after slipping on Tuesday following unemployment data.
DAX index in Germany rose 0.5%, the CAC 40 in France gained 0.3%.
Stay ahead of the FTSE — premium UK stock insights and real-time market movers with InvestingPro UK round up On the economic front, the UK’s annual inflation rate fell sharply in January to 3.0%, down from 3.4% in December, increasing the likelihood that the Bank of England will cut interest rates at its March policy meeting. The December figure had marked a slight increase from November’s 3.2%, which was the first rise in the inflation rate for five months.
The monthly CPI figure fell 0.5% after rising 0.4% in December. Core CPI, which excludes volatile energy and food prices, dropped 0.6% on a monthly basis and came in at 3.1% annually, down from 3.2% in December.
ING’s UK economist James Smith described the inflation data as "a bit of a mixed bag," noting that while food inflation is down sharply, services inflation remains stickier. Smith added that "the real action will come in April" when headline and services inflation figures could make the Bank "more comfortable with the inflation outlook."
In corporate news, BAE Systems PLC (LON:BAES) raised its dividend payout after defense orders reached record levels, supported by increased military spending across Europe and the United States.
The British defense company recommended a final dividend of 22.8 pence, bringing the total dividend for the year to 36.3 pence, representing a 10% increase. The company also repurchased 30 million shares during the year at a cost of £502 million.
Meanwhile, Glencore PLC (LON:GLEN) reported lower full-year earnings despite record-high copper prices, which were not enough to offset declining profits from its coal business. The miner’s core earnings (adjusted EBITDA) fell 6% to $13.5 billion, while revenue increased 7% year over year to $247.5 billion. Adjusted EBIT dropped 14% to $6 billion, with earnings per share coming in at $0.03.
Market research firm YouGov plc (LON:YOU) named Ian Griffiths as its permanent chair on Wednesday. Griffiths, who joined YouGov’s board in September 2025, replaces Deborah Davis who had been serving in the role on an interim basis since February 2025.
