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FTSE 100 fall 0.5%, FTSE 250 ends flat

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UK consumer price inflation eases to 3.6% in October

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Defence stocks fall on signs of U.S. push over Ukraine war

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WH Smith ( WHTPF ) gains after CEO exits

(Updates after markets close)

Nov 19 (Reuters) - London's FTSE 100 slipped for the

fifth consecutive session on Wednesday with defence and

financial stocks leading the downturn, while inflation data

bolstered expectations for a December interest rate reduction.

The blue-chip index finished 0.5% lower as aerospace

and defence stocks tumbled 2% to their lowest

level in over two months. The sector's decline followed

indications of renewed U.S. efforts to resolve the

Russia-Ukraine war, which broadly pressured European defence

equities.

Defence giant BAE Systems led the decline, shedding

4.5%, while aero engine manufacturer Rolls-Royce and

engineering firm Babcock International ( BCKIF ) declined 0.6% and

3.4% respectively.

Despite Wednesday's pullback, the sector gained 70%

year-to-date, fuelled by the UK government's enhanced military

spending commitments this year.

On the economic front, inflation in Britain slowed down in

October for the first time since May, offering relief to the

government before next week's annual budget and boosting the

chance of a rate cut by the Bank of England.

Traders are pricing in about 86% odds of a quarter-point

reduction in December, according to swap markets data.

"MPC officials will, of course, still be glued to the

details of next week's Autumn Budget, but assuming it's as

tax-heavy and unfriendly to growth as we expect, a December rate

cut seems to be a fairly safe bet," said Matthew Ryan, head of

Market Strategy at global financial services firm Ebury.

Supporting this outlook, a Reuters poll showed a majority of

economists now expect a rate cut in December and again early

next year.

Banking stocks dropped 0.7%, falling for a

fifth straight session.

On the flip side, precious metal miners

gained 3% as gold prices rose over 1%.

The mid-cap FTSE 250 index ended little changed

with Workspace Group ( WKPPF ) falling 5.3% after the office

provider reported a 4% decline in property valuations for the

first half of 2025.

Among other movers, WH Smith ( WHTPF ) gained 7.2% after the

travel retailer said Carl Cowling had stepped down as CEO

following an independent review, which revealed accounting

failures in the U.S. operations.

Sage's shares climbed 1.2% after the software

company reported better-than-expected annual operating profit.