Little movement on London market

London shares hovered near the break-even mark today as the latest inflation data pointed to an August hike in interest rates.

Although the increase in the Consumer Prices Index to 1.6% was widely expected, it will add to fears at the Bank of England that a trend of faster growth in prices is taking hold.

Expectations of a quarter-point increase in the cost of borrowing next month helped to keep the FTSE 100 Index in check, up just 2.2 points at 4362.2 by mid-morning.

The stock driving the Footsie forward was building products group Wolseley as investors welcomed news that its businesses in North America and the UK had outperformed their markets. Shares rose more than 4% or 36p to 868.5p.

But another poor day on the markets for Vodafone saw the mobile phone group slip 1.5p to 116.75p – its lowest share price since September. Broker Credit Suisse said Vodafone may not provide much near-term upside in a sector where growing competition was threatening profitability.

Marks & Spencer fell 2.5p to 361.5p as investors continued to search for clues as to the likely outcome of the ongoing bid battle involving retail tycoon Philip Green.

Outside the top flight, pubs group JD Wetherspoon recovered slightly to stand 4.25p lower at 264p. The stock had earlier dropped 4% after it said competition and Euro 2004 football would cause full-year profits to come in below expectations.

The trading update undermined confidence in the pubs sector and drove a host of rivals on to the back foot, including Enterprise Inns – down 4p at 558.5p. Wolverhampton & Dudley Breweries also weakened 12p to 892p.