UK stocks close higher after inflation data; Fed decision in focus
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FTSE 100 up 0.1%, FTSE 250 up 0.3%
UK inflation hits 8-month high, underlying pressures steady
Fed decision due at 1900 GMT
AstraZeneca falls after Merck's deal with China's Hansoh
Updated at market close
Dec 18 (Reuters) -Britain's FTSE 100 nudged slightly higher on Wednesday, led by banks, while investors digested key inflation data that could influence the future course of domestic monetary policy and awaited the U.S. Federal Reserve's interest-rate decision.
The FTSE 100 index .FTSE edged up 0.1%, but still hovered around the more than three-week low hit on Tuesday. The domestically focussed FTSE midcap 250 .FTMC rose 0.3%, its first gain after seven sessions of losses.
Banks .FTNMX301010 led the sectorial gains, up 1.2%, while heavyweight energy companies .FTNMX601010 were up 0.4%, boosted by higher crude oil prices.
Meanwhile healthcare companies .FTNMX201030 were the most impacted, with an about 1% decline, led by AstraZeneca AZN.L that fell 1.5% after U.S. drugmaker Merck MRK.N signed an up to $2 billion deal for oral weight-loss drug with China's Hansoh.
Just a day ahead of the Bank of England's rate decision, data showed British inflation rose to an eight-month high in November. But offering some relief was an underlying measure of price growth holding steady, weighing on the sterling and, in turn, also boosting stocks.
Separately, a survey showed British manufacturers reported the biggest fall in output since the COVID-19 pandemic in late 2024, and are even more downbeat about the start of next year.
The BoE is widely expected to hold rates steady this week, while the central bank is expected to ease borrowing costs by around 50 basis points in 2025, data compiled by LSEG showed.
International Consolidated Airlines Group ICAG.L gained 1.9% after two brokerages raised their target price on the stock.
IntegraFin Holdings IHPI.L fell 12.7% to the bottom of the mid-cap index after the investment platform said it expects annual administrative costs to rise by about 9% in 2025 and reported lower-than-expected annual revenue for 2024.
OSB Group OSBO.L slumped 6.5% after Peel Hunt downgraded the British lender's stock.
Reporting by Ankika Biswas and Sukriti Gupta in Bengaluru; Editing by Shounak Dasgupta and Alan Barona
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