London stocks were a little weaker by midday on Wednesday as investors mulled an unexpected increase in UK inflation and looked ahead to a speech by US President Donald Trump at the World Economic Forum in Davos.
The FTSE 100 was down 0.2% at 10,103.08.

Trump is due to deliver a speech at Davos at around 1330 GMT to discuss the Greenland dispute.

Dan Coatsworth, head of markets at AJ Bell, said: "The hope will be that some form of compromise can be found as Donald Trump meets with European leaders and speaks at the World Economic Forum in Davos."

On home shores, figures from the Office for National Statistics showed inflation rose by more than expected in December, after a jump in tobacco prices and airfares.

The consumer price index rose by 3.4%, up from 3.2% in the 12 months to November. Consensus had been for a more modest rise, to 3.3%.

Alcohol and tobacco prices jumped by 5.2%, up from 4.0% a month previously, following a recently-introduced increase in excise duty. That rise usually comes through in November, but this year fell in December following the later-than-usual Budget.

Airfares, meanwhile, were affected by the timing of return flights over Christmas and New Year.

Rising food costs, particularly for bread and cereals, were also an upward driver, however, up 4.5%. Prices had risen by 4.2% in November.

Including housing costs, the CPIH rose by 3.6% in the 12 months to December, up from 3.5% in November.

The December print is the first rise in CPI for five months.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said that from a market perspective, the CPI "doesn't materially shift the narrative, with a February rate cut effectively off the table".

"The picture looks more encouraging in April when another cut is expected, as inflation could fall sharply towards the 2% target with regulated price increases coming in lower than last year," he added.

Investors were also mulling the latest Industrial Trends Survey from the Confederation of British Industry, which showed that manufacturing output fell in the quarter to January, while optimism remains weak.

Output volumes declined, with a net balance of -25, down from -21 in December. A balance is the weighted percentage of firms reporting an increase and those reporting a decrease.

The drop in output volumes was broad based, in 14 out of 17 sub-sectors, driven by declines in the food, drink & tobacco, metal products, mechanical engineering and chemicals sub-sectors.

The CBI also said that firms expect output to fall again in the three months to April.

Ben Jones, senior lead economist at the CBI, said: "Manufacturers are finding conditions extremely tough, with output and orders falling again. Many firms report seeing customers delay decisions, order only what they strictly need, or hold back from committing altogether, leaving order books thin and confidence fragile.

"At the same time, cost pressures - from rising wages, high energy prices and taxes - are squeezing margins and weighing on competitiveness, pushing firms to plan price rises even as demand remains subdued.

"The government must now focus on lowering the cost of doing business to unlock investment and growth. Recent pragmatism shown on areas such as day one rights is welcome, but manufacturers want to see the government expedite much needed energy costs support and deliver greater policy clarity more generally."

In equity markets, heavily-weighted miners were among the top performers after Rio Tinto reported a bumper fourth quarter. Iron ore production from Pilbara and total copper output beat analysts' estimates to reach new records, as the company met or exceeded full-year guidance across all major product groups.

Burberry rallied as the luxury fashion brand said comparable retail sales rose 3% in the third quarter, which was an improvement on the 4% decline seen in the same period a year earlier.

Educational publisher Pearson advanced after saying it will kick off a new £350m share buyback programme, half of which will be repurchased by the middle of May.

JD Sports gained after it held annual guidance as fourth-quarter like-for-like sales fell 1.8% with a return to growth in North America - the retailer's biggest market - offset by a weak performance in the UK and Europe amid a volatile consumer environment.

Premier Foods rose as the Mr Kipling and Oxo owner lifted its full-year profit outlook after strong Christmas trading.

Currys pushed higher as the electricals retailer said that full-year profit was set to beat market expectations after "very strong" trading over the peak Christmas and new year period.

Quilter rose as it reported record quarterly core net inflows of £2.4bn, while Elementis was up as it said trading in the three months to the end of December was "marginally ahead" of full-year expectations.

On the downside, credit-checking firm Experian slid despite posting a 12% increase in third-quarter revenue, while Admiral was knocked lower by a downgrade to 'sell' at Goldman Sachs.

Wetherspoons slumped as it warned that first-half profits were likely to be lower than the previous year and that its full-year trading outcome was set to be "slightly below" that achieved in FY25. The company said costs had been higher than expected.

Fellow pub group Mitchells & Butlers also lost ground.

Market Movers

FTSE 100 (UKX) 10,103.08 -0.23%
FTSE 250 (MCX) 22,917.10 -0.18%
techMARK (TASX) 5,827.95 -0.09%

FTSE 100 - Risers

Rio Tinto (RIO) 6,640.00p 5.16%
Burberry Group (BRBY) 1,279.00p 4.92%
JD Sports Fashion (JD.) 81.60p 4.24%
Anglo American (AAL) 3,366.00p 3.79%
Glencore (GLEN) 498.85p 3.50%
Diageo (DGE) 1,680.50p 3.07%
Beazley (BEZ) 1,152.00p 2.31%
Pershing Square Holdings Ltd NPV (PSH) 4,540.00p 2.21%
Antofagasta (ANTO) 3,624.00p 2.17%
Smith & Nephew (SN.) 1,223.50p 1.92%

FTSE 100 - Fallers

Experian (EXPN) 3,035.00p -5.95%
ICG (ICG) 1,939.00p -4.01%
Rolls-Royce Holdings (RR.) 1,247.50p -2.62%
Admiral Group (ADM) 3,002.00p -2.41%
Relx plc (REL) 2,938.00p -2.36%
Diploma (DPLM) 5,375.00p -2.27%
London Stock Exchange Group (LSEG) 8,808.00p -1.92%
Babcock International Group (BAB) 1,456.00p -1.75%
Lloyds Banking Group (LLOY) 100.70p -1.66%
Compass Group (CPG) 2,219.00p -1.51%

FTSE 250 - Risers

Premier Foods (PFD) 180.80p 6.86%
Currys (CURY) 132.00p 5.26%
Oxford Nanopore Technologies (ONT) 157.20p 4.45%
Hochschild Mining (HOC) 628.50p 4.23%
Endeavour Mining (EDV) 4,384.00p 4.18%
Quilter (QLT) 195.00p 4.00%
BlackRock World Mining Trust (BRWM) 986.00p 3.68%
B&M European Value Retail S.A. (DI) (BME) 171.60p 2.88%
Pan African Resources (PAF) 135.00p 2.43%
Wizz Air Holdings (WIZZ) 1,275.00p 2.25%

FTSE 250 - Fallers

Wetherspoon (J.D.) (JDW) 692.50p -6.17%
Close Brothers Group (CBG) 502.00p -4.29%
Ocado Group (OCDO) 260.00p -3.42%
Lancashire Holdings Limited (LRE) 616.00p -3.14%
TBC Bank Group (TBCG) 3,865.00p -2.89%
Aston Martin Lagonda Global Holdings (AML) 59.60p -2.38%
Mitchells & Butlers (MAB) 256.00p -2.29%
Spire Healthcare Group (SPI) 174.80p -2.24%
Kainos Group (KNOS) 926.00p -2.17%
Oxford Biomedica (OXB) 868.00p -2.14%