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FTSE 100 up 0.2%; FTSE 250 flat

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UK inflation unexpectedly rises in June

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AstraZeneca ( AZN ) down after drug fails late-stage study goal

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Antofagasta ( ANFGF ) gains on higher copper output

By Ankita Yadav

July 16 (Reuters) - London's main stock indexes were

subdued on Wednesday, as a stronger-than-expected rise in

domestic inflation slightly cooled bets of interest rate cuts

from the Bank of England.

The blue-chip FTSE 100 was up 0.2% as of 1035 GMT,

while the midcap FTSE 250 index was flat.

Britain's annual rate of consumer price inflation

unexpectedly rose to its highest in over a year at 3.6% in June,

as higher costs of motor fuel, transport and food pushed up

prices.

"There is a real threat of stagflation as the rate of

inflation moves higher and the economy is stuck in the mud. It

puts the Bank of England in a tricky situation with regards to

monetary policy decisions," said Dan Coatsworth, investment

analyst at AJ Bell.

The central bank is largely expected to cut interest rates

by a quarter-point in August after recent economic data fuelled

concerns of weaker domestic growth and labour market, but the

chances of such a move dimmed after Wednesday's inflation data.

The BoE will closely watch the employment and wages figures

due on Thursday.

Meanwhile, UK finance minister Rachel Reeves on Tuesday

announced measures to boost the finance sector, including

reforming requirements for banks to separate retail and

investment banking activities, easing regulations and a plan to

get more savers investing in stocks.

In corporate updates, AstraZeneca ( AZN ) fell 1.1% after

the drugmaker's experimental therapy, anselamimab, failed to

meet the main goal of a late-stage study for the treatment of AL

amyloidosis, a rare condition that causes a buildup of protein

deposits in the body.

Rio Tinto rose 1.3% after the mining giant reported

its strongest second-quarter iron ore production since 2018, a

day after promoting its iron ore chief Simon Trott to CEO.

Antofagasta ( ANFGF ) edged up 0.5% after the Chilean miner

said its copper production rose 11% in the first half of 2025,

on improved output from its two concentrators.

(Reporting by Ankita Yadav in Bengaluru; Editing by Shinjini

Ganguli)