The UK stock market kicked off Wednesday on a high note, buoyed by the unexpected deceleration in consumer inflation and the anticipation of pivotal US inflation data. According to the Office for National Statistics, UK consumer price inflation cooled to 2.5% in December, down from November's 2.6%, defying market forecasts of a rise to 2.7%. Producer price inflation also showed a more modest decline than expected. This data has injected a dose of optimism into the markets, with the FTSE 100 climbing 0.7% this morning.

Across the pond, the US inflation figures for December, set to be unveiled this afternoon, could be a game-changer for the markets. The Consumer Price Index (CPI) is anticipated to show a 2.9% year-on-year increase for December. This figure is pivotal as it could sway the Federal Reserve's interest rate decisions. Recent US Producer Price Index (PPI) data revealed a smaller-than-expected uptick, offering some comfort to the markets.

In the corporate arena, Shell has announced plans to expand its petrochemical complex in Daya Bay, China, through its joint venture with CNOOC. The expansion, slated for completion by 2028, will feature new facilities to cater to China's domestic demand. Meanwhile, Pfizer is offloading 700 million shares in Haleon, trimming its stake from 15% to about 7.3%. Hays has issued a profit warning, citing a 15% year-on-year drop in net fees for the second quarter. Vistry has cautioned about uncertain market conditions due to sluggish interest rate cuts and rising build-cost inflation, yet it remains steadfast in its earnings forecast for 2024.

Things to read today: