British equities traded higher on Wednesday, with the benchmark FTSE 100 up 0.18% at closing, despite concerns over rising UK inflation and elevated energy prices linked to the US-Iran war.
Annual inflation rate in the UK climbed to 2.9% in July from 2.6% in June, according to data from the Office for National Statistics. The monthly rise in consumer prices also accelerated to 0.3% from 0.1%, with both the latest readings matching consensus estimates for the month. Excluding energy, food, alcohol and tobacco, however, the annual inflation rate was stable at 2.6%, above the expected 2.5%.
“The energy-driven jump in CPI inflation from 2.6% yoy in June to 2.9% yoy July does not make it any more likely that the Bank of England (BoE) will raise interest rates. The increase was in line with expectations (Bloomberg consensus: 2.9%, Berenberg: 2.9%, BoE: 2.8%) and wholly driven by a belated rise in household energy bills to reflect the effect of the Iran war on gas prices. While the contribution to inflation from energy prices jumped, underlying inflation continued to ease,” Berenberg said.
On the corporate front, Smith & Nephew (SN.L) declined 3.83% at closing after Chief Financial Officer John Rogers tendered his resignation, effective Sept. 30, to pursue an external opportunity in the US. The medical technology company initiated the search process for a new CFO.
Meanwhile, Diageo’s (DGE.L) fiscal 2026 report showed that the wine and spirits maker downsized by 1,922 employees year over year. Staff totaled 27,938 at the end of June, compared with 29,860 earlier. As part of an ongoing restructuring program, the majority of staff reductions in its global markets are expected to be completed by Sept. 1. The stock was 0.15% in the red.
HSBC (HSBA.L) and Standard Chartered (STAN.L) completed the first bank-to-bank tokenized deposit interoperability transaction through a live cross-border payment. The lenders executed the transaction through the exchange of payment messages over Swift’s blockchain-based ledger, creating tokenized obligations for the two lenders. HSBC was 0.82% lower, while Standard Chartered was down 1.82%.
Oil and gas heavyweights Shell (SHEL.L) and BP (BP.L) rose 0.85% and 0.99%, respectively, as fuel prices climbed amid no progress between the US and Iran on the reopening of the Strait of Hormuz. Additionally, Shell Lubricants extended its global partnership with South Korean automaker Hyundai Motor for five years, retaining its position as Hyundai’s recommended global supplier of aftersales lubricants.
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