London’s FTSE 100 hit a new all-time high on Wednesday, shrugging off a hot UK inflation print and fresh falls among technology stocks on Wall Street.

The FTSE 100 index closed up 98.92 points, 1.1%, at 9,288.14.

It had earlier traded as high as 9,301.19.

The FTSE 250 ended up 52.62 points, 0.2%, at 21,885.88, but the AIM All-Share finished 3.48 points lower, 0.5%, at 759.74.

Figures from the Office for National Statistics showed UK consumer price inflation picked up to 3.8% in July from 3.6% in June, exceeding FXStreet-cited market consensus expectations of 3.7%.

On a monthly basis, consumer prices rose 0.1%, defying the consensus forecast of a 0.1% decrease but slowing from a 0.3% rise in June.

Core consumer price inflation, which excludes energy, food, alcohol and tobacco, picked up to 3.8% annually from 3.7% in June, and against consensus expectations of another 3.7% rate.

Annual service price inflation, a gauge which has been in focus in recent months, picked up to 5.0% in July from 4.7% in June, ahead of 4.8% consensus.

The ONS said that “transport, particularly air fares, made the largest upward contribution” to the July annual inflation rate, partly due to the timing of school holidays.

Barclays said the figures increase the risk that the Bank of England will hold interest rates steady for longer.

Callum McLaren-Stewart, at Citi, thinks the hurdle for a September rate cut now looks “borderline impossible” although he continues to see a cut in November as likely on the basis of fiscal contraction in the autumn budget.

But Pantheon Macroeconomics thinks sticky inflation will keep rates on hold for the rest of the year.

“The big picture remains that inflation is set to stay miles above target for the foreseeable future,” Elliott Jordan-Doak, at Pantheon, said.

Rate sensitive housebuilders bucked the upbeat mood on the FTSE 100.

Persimmon fell 0.3% and Taylor Wimpey dipped 0.5%.

In better news for the sector, average UK house prices increased by 3.7% to £269,000 in the 12 months to June, picking up from a downwardly revised 2.7% in the 12 months to May, according to ONS data.

May’s figure was revised from growth of 3.9% before, partly reflecting a change in how new build inflation is assessed.

House prices rose 3.3% in England, 2.6% in Wales, 5.9% in Scotland and by 5.5% in Northern Ireland from a year ago.

Despite the fading rate cut hopes, the pound eased to 1.3468 dollars late on Wednesday afternoon in London, compared with 1.3503 dollars at the equities close on Tuesday. The euro edged down to 1.1661 dollars, lower against 1.1669 dollars. Against the yen, the dollar was trading lower at 147.15 yen compared with 147.75 yen.

In Europe, the CAC 40 in Paris ended slightly lower, while the DAX 40 in Frankfurt closed down 0.6%.

In New York, the Dow Jones Industrial Average was up 0.1%, the S&P 500 was 0.5% lower, and the Nasdaq Composite declined 1.2%.

The yield on the US 10-year Treasury was at 4.29%, narrowed from 4.31%. The yield on the US 30-year Treasury was 4.90%, trimmed from 4.91%.

Technology stocks bore the brunt of the losses on Wall Street after a report produced by a branch of the Massachusetts Institute of Technology suggested 95% of companies are getting zero return on their investment in generative artificial intelligence.

Russ Mould, at AJ Bell, noted these findings follow hot on the heels of comments from OpenAI chief executive Sam Altman that suggested investors are “over-excited” in this area.

“For now, this looks like a mild and possibly necessary correction after an extremely strong run for this space and the companies within it. Investors will be watching closely to see if AI stocks stabilise from here or the selling continues. Nvidia’s quarterly earnings next week now look even more crucial than they already were,” Mr Mould commented.

On the FTSE 100, ConvaTec gained 5.6% as the medical products supplier started a share buyback worth up to 300 million dollars.

United Utilities firmed 3.5% as Barclays upgraded to “overweight” and set a 1,535 pence share price target.

But the Nasdaq losses on Wall Street saw Polar Capital Technology Trust and Scottish Mortgage Investment Trust – both investors in the technology sector – fall 3.2% and 1.6% respectively.

On the FTSE 250, Ithaca Energy shot up 10% after reporting a big jump in half-year profit, confirming its dividend plans, and increasing its 2025 production guidance.

The North Sea-focused oil and gas company said pre-tax profit almost tripled to 146.2 million dollars in the second quarter from 52.9 million dollars a year before, as revenue more than doubled to 746.4 million dollars from 361.6 million dollars.

Average production in the first half was 123,600 barrels of oil equivalent per day, up from 53,000 a year before. Ithaca raised its full-year guidance to between 119,000 and 125,000 boe per day from between 109,000 and 119,000.

On AIM, Fevertree Drinks slumped 9.9% as Exane BNP downgraded to “underperform” with a 740p per share price target.

Elsewhere, positive trading updates supported timber distributor James Latham and fishing tackle and equipment retailer Angling Direct, up 3.2% and 6.7% respectively.

A barrel of Brent traded at 66.70 dollars late on Wednesday afternoon, up from 66.08 dollars on Tuesday. Gold firmed to 3,341.46 dollars an ounce against 3,325.33 dollars.

The biggest risers on the FTSE 100 were ConvaTec Group, up 13 pence at 244.2p, United Utilities, up 39p at 1,159.5p, Unilever, up 148p at 4,692p, Cola Europacific Partners, up 200p at 6,840p and Imperial Brands, up 85p at 3,141p.

The biggest fallers on the FTSE 100 were Polar Capital Technology Trust, down 13 pence at 388.5p, Rolls-Royce, down 33.5p at 1,026p, easyJet, down 10.2p at 508.4p, ICG, down 38p at 2,162p and Scottish Mortgage Investment Trust, down 17p at 1,066p.

Thursday’s local corporate calendar has full-year results from recruiter Hays.

The global economic calendar on Thursday has a slew of composite PMI readings, UK public sector borrowing data, US weekly jobless claims figures and the Philadelphia Fed manufacturing index.

Contributed by Alliance News