(Reuters) – British stocks fell on Wednesday as investors manipulated headline inflation in Britain to hit the Bank of England's target against lower service price inflation, while Vodafone's (NASDAQ:) gains limited losses.
By 7:06 GMT, the leading stock fell 0.2% to 8,172.5 points, while the average stock fell 0.2% to 20,366.02 points. The pound rose against the dollar.
Investors faced a slower-than-expected decline in services price inflation, which the Bank of England believes provides a clearer view of medium-term inflation risks.
The data showed that service price inflation fell to 5.7% in May, compared to a Reuters poll of economists who expected 5.5%.
Fundamental rate pressures remained strong, raising investor concerns that a rate cut in August may be off the table.
The headline inflation rate returned to 2%, the Bank of England's target.
The central bank meets on Thursday to discuss borrowing costs.
Vodafone shares gained 1 percent after the mobile phone group confirmed that it had sold an 18 percent stake in India's Indus Towers for 1.7 billion euros ($1.83 billion).
Spectris stock was the biggest loser on the mid-cap index, falling 11%, after the scientific instrument maker warned of lower-than-expected profits due to weak Chinese demand.
