FTSE 100 down 0.1, FTSE 250 flat
UK services Inflation drops to 5.7 vs estimates of 5.5
Spectris warns of downbeat annual profit, shares fall
UK headline inflation at 2

June 19 Reuters London stocks edged lower on Wednesday as investors juggled Britain39;s headline inflation hitting the Bank of England39;s BoE target against a sluggish drop in services price inflation.

The bluechip FTSE 100 was down 0.1 at 8,180.42 points, while the midcap FTSE 250 was flat at 20,410.28 points. The pound gained 0.1 against the dollar and was last at 1.2728.

Investors grappled with a slowerthananticipated decline in services price inflation in May, which the Bank of England believes offers a clearer view of mediumterm inflation risks.

Markets are seeing a bit of indigestion on the details of the inflation report pushing back expectations of a first rate cut, Ben Laidler, global markets strategist at eToro, said.

Data showed services price inflation at 5.7, compared with a Reuters poll of economists who expected 5.5.

Investors are now pricing in a roughly 30 chance of an August rate cut, down from nearly 50 before the data.

If this stickiness in domestic price pressures continues, alongside ongoing resilience in economic activity, an August rate cut could well be off the table too, Zara Nokes, global market analyst at J.P. Morgan Asset Management, said.

Meanwhile, headline inflation returned to the BoE39;s target of 2.

The central bank is expected to announce its policy…