FTSE 100 edges higher on energy, defence boost

The FTSE 100 rose on Wednesday, lifted by energy and defence stocks, even as hotter-than-expected inflation data highlighted a severe cost-of-living crisis that has put the British economy at the risk of a sharp recession.

The FTSE 100 rose on Wednesday, lifted by energy and defence stocks, even as hotter-than-expected inflation data highlighted a severe cost-of-living crisis that has put the British economy at the risk of a sharp recession. The exporter-heavy FTSE 100 inched 0.2% higher, hovering near a two-month high.

Oil & gas stocks rose 1.7% on the back of higher crude prices after an incident involving a commercial vessel off the coast of Oman. UK's aerospace and defence index jumped 1.5% as geopolitical tensions rose after a missile hit a village in Poland, close to the Ukraine border. The missile, which killed two people, was unlikely to have been fired from Russia, U.S. President Joe Biden said. Russia denied it was responsible.

Surging household energy bills and food prices pushed British inflation to a new 41-year high in October, according to data published a day before finance minister Jeremy Hunt is expected to announce tax hikes and spending cuts to control price growth. Consumer prices rose by 11.1% in annual terms last month, while economists polled by Reuters had forecast the inflation rate would rise to 10.7%.

"These numbers sit uncomfortably alongside the message sent from the Bank of England in its last meeting when it argued that only modestly higher interest rates would be necessary to bring inflation back towards its 2% target," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "We are not so convinced."

The pound edged higher after hitting a three-month high in the previous session. Bank of England officials will address the parliament's Treasury Committee about the central bank's decision to increase interest rates at 1415 GMT.

Among individual stocks, British software company Sage Group jumped 6.4% after reporting a 8% rise in full-year organic operating profit. Hill & Smith gained 3.5% after the infrastructure group said it expects full-year outlook to be ahead of its expectations.

The midcap index fell 1.3%, with shares of Carnival Plc sinking 11.7% after the cruise operator said it was planning $1 billion convertible debt deal.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)