As investors continued to exercise caution in anticipation of the decision that the Federal Reserve would make later in the day, the FTSE 100 index in London opened lower on Wednesday. This was due to the fact that domestic inflation data that was lower than expected further solidified the predictions that the Bank of England would reduce interest rates this year.
As the markets eagerly awaited a decision from the Federal Reserve that could potentially set the tone for central banks around the world, the blue chip FTSE 100 (.FTSE), opens new tab, experienced a decline of 0.1% as of 08:17 GMT.
A poll conducted by Reuters, which was conducted in advance of the Bank of England's monetary policy update on Thursday, found that the rate of inflation in the United Kingdom was 3.4% in February. This figure was somewhat lower than the inflation rate that experts had anticipated, which was 3.5%.
The money markets have priced in approximately 70 basis points of rate reduction for this year, which is an increase from the approximately 67 basis points that were anticipated previous to the release of the data.
A rise of 0.7% was seen in the rate-sensitive homebuilders index (.FTNMX402020). This index was among the top performers in the sector.
Johnson Matthey (JMAT.L), which is among the best performances, surged 6.2% after the company announced that it will sell its medical device components business to Montagu Private Equity for $700 million.
The mid cap FTSE 250 (.FTMC), was up 0.1%, with Johnson Matthey being among the top performers.
A decline of five percent was seen in Burberry (BRBY.L), opens new tab, which followed the decline of the European luxury goods group Kering (PRTP.PA), which issued a warning about the possibility of a dip in sales during the first quarter.
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