FTSE 100 inches higher on Fed pause bets; ECB decision on watch

UK's FTSE 100 opened higher on Thursday after U.S. inflation data bolstered bets that the Federal Reserve will keep interest rates steady next week, while Melrose and Unite Group fell in ex-dividend trading. The exporter-heavy FTSE 100 index edged up 0.3% in early trade, while the domestically focussed FTSE 250 index was flat.

UK's FTSE 100 opened higher on Thursday after U.S. inflation data bolstered bets that the Federal Reserve will keep interest rates steady next week, while Melrose and Unite Group fell in ex-dividend trading.

The exporter-heavy FTSE 100 index edged up 0.3% in early trade, while the domestically focussed FTSE 250 index was flat. Data on Wednesday showed the annual rise in underlying U.S. inflation was the smallest in nearly two years, even as consumer prices increased by the most in 14 months in August.

The European Central Bank (ECB) is set to decide on Thursday whether to raise its key interest rate to a record high in what should be its final step in the fight against inflation, or take a break as the economy deteriorates. Shares of real estate firm Unite Group, product testing company Intertek Group and aerospace supplier Melrose declined between 0.5% and 1.5% as they traded ex-dividend.

Shares of Hipgnosis Songs Fund soared 5.9% after the music catalogues investor said it would sell 29 catalogues and a portfolio of non-core songs to Hipgnosis Songs Capital for $465 million as it looks to fund a share buyback programme.