London stocks listless as Fed decision on deck

UK's main stock indexes were subdued on Wednesday as investors keenly awaited a crucial policy decision by the US Federal Reserve due later in the day, while assessing the growing likelihood of persistent rate hikes by the Bank of England, reports Reuters.

Both the resource-heavy FTSE 100 and domestically focused FTSE 250 midcap indexes held their ground at 0824 GMT.

Data on Tuesday signalled that US consumer prices rose modestly in May, boosting bets that the Fed will hit the brakes on its rate-hiking cycle on Wednesday, while expectations of a hike in July remained intact.

"We might have to do a little bit more, but the bits of inflation that have been fairly persistent are set to cool over the summer with the labour market also slowly cooling off," said Andrew Bell, chief executive at Witan Investment Trust.

"Time is on the side of making a pause look permanent."

Meanwhile, British wage growth soared and employment jumped in the three-month period ended April, raising expectations of more rate hikes from the BoE. The central bank is expected to deliver a 25-basis-point rate hike next week.