By Sanchayaita Roy
(Reuters) -British stocks inched higher on Wednesday, recovering from the previous session’s losses, as investors awaited the U.S. Federal Reserve’s policy decision at the close of its two-day meeting later in the day.
The benchmark FTSE 100 was up 0.2% by 1013 GMT, while the domestically focused FTSE 250 gained 0.4%.
The U.S. central bank is expected to reduce borrowing costs by at least 25 basis points at 2 p.m. ET, after a series of economic indicators pointed to a weakening jobs market.
Investors will also focus on Chair Jerome Powell’s comments for clues on the Fed’s rate trajectory.
Meanwhile, data released on Wednesday showed that British inflation held steady at 3.8% in August, the highest among major advanced economies, reinforcing expectations that the Bank of England will delay cutting interest rates until next year.
The rise in food prices, seen by BoE as key for shaping public inflation expectations, was the sharpest since January last year.
“This morning’s UK inflation data supports our view that the BoE will refrain from lowering rates again through the remainder of 2025,” said Matthew Ryan, head of market strategy at global financial services firm Ebury.
“With swap markets assigning no chance of any change in rates from the MPC on Thursday, the focus for investors will be on the bank’s rate guidance.”
Personal goods rose the most among sectors, up 4.9%, with Burberry climbing 5.5%.
Among individual stocks, Centrica was among the top gainers in the FTSE 100, up 3.7%, after Morgan Stanley called the energy firm a top pick.
Ice cream unit Ben & Jerry’s co-founder Jerry Greenfield quit the company after a rift with parent Unilever, with shares struggling for direction in early trading.
PRS REIT rose 6.1% after announcing plans to sell its operating unit to Waypoint Asset Management for 646.2 million pounds ($881 million).
Additionally, U.S. President Donald Trump formally begins his second state visit to Britain on Wednesday.
(Reporting by Sanchayaita Roy in Bengaluru, additional reporting by Joel Jose; Editing by Vijay Kishore)
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