UK inflation at the weakest rate since Sept 2021
Johnson Matthey hits 10month high on medical device unit sale
FTSE 100 flat, FTSE 250 up 0.3

March 20 Reuters London39;s FTSE 100 closed flat on Wednesday with caution looming ahead of the U.S. Federal Reserve39;s policy decision, while softer domestic inflation data cemented bets of interest rate cuts this year from the Bank of England.

The globallyfocussed FTSE 100 held its ground at 7,737.38 points with traders gearing up for the Fed39;s monetary policy decision at 1800 GMT and remarks on the timing of interest rate cuts.

Closer to home, Britain39;s inflation cooled to 3.4 in February ahead of the Bank of England39;s monetary policy verdict on Thursday and offering some respite to Prime Minister Rishi Sunak before an election expected later this year.

Rate sensitive sectors such as banks and gained 0.6 and 1.1 respectively.

Traders now see about 70 basis points of rate cuts by the BoE this year, up from around 67 bps prior to the data release.

While the Bank of England will also cheer the decline in the headline figure, it is unlikely to be convinced that the battle against inflation is won, said Zara Nokes, global market analyst at J.P. Morgan Asset Management.

The Bank will instead be keeping a watchful eye on the mediumterm inflation outlook, particularly the domesticallygenerated inflation originating from the services sector.

So far this year, UK stocks have underperformed developed economy peers, given…