FTSE inches higher as soaring oil prices raise inflation concerns

London stocks finished a touch higher on Tuesday during a jittery session as traders faced further concerns about inflation persistence.

The price of Brent crude oil swung above 95 US dollars a barrel for the first time in 2023 as a result of supply cuts in Saudi Arabia and Russia.

It means prices have jumped by over a quarter since June, raising concerns that it could impact efforts by global economies to bring inflation down quickly.

A barrel of Brent crude rose by 0.93% to 95.31 US dollars as markets were closing in London.

It also adds pressure as UK traders were already firmly focused on inflation, ahead of a key set of data from the Office for National Statistics on Wednesday morning, which will show the Consumer Price Index inflation reading for last month.

The FTSE 100 moved 0.09%, or 7.26 points, higher to finish at 7,660.2.

Danni Hewson, head of financial analysis at AJ Bell, said the caution over inflation also comes amid the prospect of key interest rate decisions this week.

“It’s like waiting for the other shoe to drop,” she said.

“Within the space of 48 hours, investors will learn exactly how hot inflation is in the UK and how central bankers on both sides of the Atlantic are going to move on rates.

“Markets are pretty good at reading the room, but inflation has proved to be sneaky and central bankers find themselves in a less-than-straightforward position.”

Elsewhere in Europe, Germany’s Dax index was 0.4% lower for the day and the Cac 40 closed up 0.08%.

Meanwhile, sterling was steady as currency traders held expectations for a possible interest rate rise by the Bank of England on Thursday.

The pound was flat at 1.238 US dollars and was 0.12% higher at 1.159 euros at market close in London.

In company news, Kingfisher shares slid after the DIY giant said profits dropped by a third, following wet weather and low consumer confidence dampening sales in Europe.

The B&Q owner cut its full-year earnings outlook as a result, telling investors it lowered its adjusted pre-tax profit expectations for the full year to around £590 million from the previous guidance of £634 million.

Kingfishers shares finished down 28.8p at 206.8p.

Hargreaves Lansdown was among the FTSE 100’s top performers after the investment platform and services firm delivered strong profits in the face of “challenging” market conditions.

It said pre-tax profits jumped over 50% to £402.1 million in the 12 months to the end of June despite weaker new business.

Shares in Hargreaves Lansdown rose by 37.6p to 802.6p at the close.

Online retail business Naked Wines saw shares go sour during the session after it cautioned that its future trading could be in doubt if a “combination” of factors affects its cash flow.

It came as the London-listed firm swung to a £15 million pre-tax loss for the year to April 3, from a £2.9 million profit a year earlier. Shares fell  7.8p to 62.2p as a result.

The biggest risers on the FTSE 100 were Hargreaves Lansdown, up 37.6p to 802.6p, Marks & Spencer, up 6p to 228.5p, 3i Group, up 38p to 2,085p, Lloyds, up 0.74p to 42.9p, and WPP, up 12.4p to 765p.

The biggest fallers on the FTSE 100 were Kingfisher, down 28.8p to 206.8p, Burberry, down 87p to 2,065p, ConvaTec, down 6p to 215p, Antofagasta, down 39p to 1,416p, and Entain, down 26.5p to 1,088p.