London Shares Rally as Cooling Inflation Bolsters Rate Cut Expectations

11:49 AM EST, 12/17/2025 (MT Newswires) -- London's FTSE 100 ended 0.93% in the green on Wednesday after UK inflation dropped in November for the second straight month, reinforcing expectations of monetary policy easing. Britain's annual inflation rate fell to 3.2% in November from 3.6% in October, according to data from the Office for National Statistics. Analysts expected a 3.5% rate for the month. "Much faster disinflation than the BoE expected would clear the path for the central bank to provide more support to demand in 2026," said Berenberg. "After a 25 [basis point] cut to 3.75% tomorrow (now guaranteed) the market priced in one more cut by mid-2026 with a 40% chance of a second before this inflation release. The implied probability of that second 2026 reduction is now up to 70%." In corporate news, Bunzl (BNZL.L) shares declined 2.07%, making the distribution and outsourcing company the second-worst performer on the blue-chip index, after its 2026 group operating margin was forecast to be "slightly down" on an annual basis due to continued economic and geopolitical uncertainty. "Despite what has remained a challenging market, we expect to meet our [adjusted operating profit] outlook for 2025, which was set out in April this year," said Chief Executive Officer Frank van Zanten. "We continue to remain strongly focused on performance across the Group and are encouraged by operational improvements being made and new business wins in North America." RBC Capital Markets flagged the market's possible reaction to the update, noting a negative sentiment toward the 2026 margin guidance. "Key focus today will be on the weaker FY26 margin outlook and decoding what BNZL means by 'slightly down' YoY, vs consensus assumption of very slightly up. This remains a key buy side concern that BNZL is now in a margin downcycle, having had a bonanza through lockdowns and is now facing a tougher consumer backdrop," the research firm wrote in a quick-take report.