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UK stocks drag as investors cautious despite US inflation slowing

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Global stocks moved lower on Thursday as investors digested new data coming from the US economy.

London’s FTSE 100 was down 6.01 points, or 0.07%, to close at 8,237.73, with housebuilders among the stocks dragging on the index.

Investors were paying attention to new inflation data from the US, which showed the headline rate slowed in September, as overall price rises continue to ease across the world’s largest economy.

Kathleen Brooks, research director at XTB, said: “Today’s US inflation report was good, but not good enough to dispel fears that US inflation could reignite in the coming months.

“The headline rate moderated to 2.4% in September, down from 2.5%, but the core rate rose to 3.3% from 3.2% in August.

“The largest upside contributors to inflation included service sector inflation, electricity prices and food prices, which rose by 0.4% month-on-month, stemming a trend of deflation for food prices.”

She said that market expectations of another 0.25 percentage point reduction in interest rates next month had ticked up following the inflation release.

Separate data showed an increase in the number of initial jobless claims last month, although experts said it could partly reflect extreme weather conditions leading to volatility in the collection of data.

In New York, the S&P 500 and Dow Jones were both down about 0.2% by the time European markets closed.

In Paris, the Cac 40 was down 0.24% and in Frankfurt, the Dax closed 0.25% lower.

The pound was down about 0.1% against the US dollar to 1.31, and more or less flat against the euro at 1.195.

The price of Brent crude oil rose about 2.4% to 78.5 US dollars per barrel.

Simply Be owner N Brown has returned to profit (N Brown/PA)

In company news, shares in Simply Be owner N Brown moved higher after revealing it swung to a pre-tax profit over the first half of its financial year.

It generated £200,000 over the six months to August 31 against losses of £2.8 million a year ago, after a period of cost-cutting and focusing on more profitable sales.

Shares in N Brown were 4.6% higher at close.

GSK also saw its share price jump after reporting that it had struck a 2.2 billion US dollar (£1.68 billion) settlement to resolve lawsuits involving about 80,000 people over its discontinued heartburn drug Zantac.

The pharmaceutical giant has faced a long-running saga around Zantac, which was discontinued in the US amid allegations that the drug caused cancer.

The settlement was seen as a victory for GSK after some analysts had estimated the figure would be higher.

Shares in GSK closed 3.2% higher.

The biggest risers on the FTSE 100 were Fresnillo, up 22p to 654p, Beazley, up 26p to 780p, GSK, up 47p to 1,505p, Next, up 186p to 10,050p, and Endeavour Mining, up 26p to 1,701p.

The biggest fallers on the FTSE 100 were Taylor Wimpey, down 7.9p to 151.95p, Vistry, down 43.5p to 901p, BAE Systems, down 51.5p to 1,251.5p, Whitbread, down 96p to 3,079p, and WPP, down 21.8p to 755.8p.