FTSE 100 live: London flat after inflation fall as Admiral and Aviva lead gains

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London's FTSE indexes were trading lower as investors await the latest interest rate decision from the US Federal Reserve later today.

The FTSE 100 started Tuesday flat with investors still worried about a further rate hike by the Bank of England despite a drop in inflation.

The capital’s premier blue-chip index opened low, fluctuating between 0 and 0.01 per cent in the first hour of trading, sitting at 7,388.08 by 09.45.

Headline inflation dropped to 6.8 per cent in July, as the Bank of England’s interest rate hikes appear to be starting to have their desired effect.

But the inflation data comes after Tuesday’s unemployment and wage figures, which showed wages growing at the fastest pace since records began in 2001.

With the rate of price rises still far higher than the Bank’s two per cent target, most analysts still predict a further rate increase in September – which would be the 15th hike in a row.

“After yesterday’s big sell-off the FTSE 100 was flat on Wednesday morning as UK inflation numbers came in broadly as expected,” said AJ Bell investment director Russ Mould.

“The record wage growth revealed on Tuesday created fears that inflation is becoming increasingly entrenched in the UK economy and beyond the headline number there were signs rising prices are getting quite sticky in this latest CPI print,” he added.

“The Bank of England may be glad of the breathing space provided by the scheduling of its next meeting which does not come until late September. This will allow it to look at a few more data points before deciding its next move on interest rates. One thing is absolutely certain – the battle against inflation is far from over,” he said.

On the corporate front, insurance giants Aviva and Admiral reported strong results, with both firms’ share prices soaring after the open.

Admiral’s share price went up 7.41 per cent after reporting it had ramped up its prices by 20 per cent in the first half of the year to stave off the worst impact of rampant inflation on its profits margins.

Meanwhile, Aviva hiked its payout to shareholders today after posting a boost in profits in the first half of the year on the back of growth across the group. Aviva’s shares jumped about 2.5 per cent in early trading.

The biggest fallers on the FTSE 100 were Antofagasta and Natwest, both falling under two per cent.

While FTSE 100 was flat, the more domestically-focussed FTSE 250 rose by a quarter of a per cent at the open, lifted by insurers Direct line, whose shares soared more than 7.5 per cent at the open.

Marks & Spencer continued to ride the wave of yesterday’s good news, with its shares up almost four per cent, while Israeli-owned fintech firm Plus500 was also up around three per cent.