(Alliance News) - Stocks in London are set to open lower on Wednesday, ahead of key UK inflation data, which could show whether hopes for a spring interest rate cut from the Bank of England are too optimistic.

Overnight, stocks in Asia plummeted as new data showed that the Chinese economy last year grew at one of its slowest rates in more than three decades.

IG says futures indicate the FTSE 100 to open down 51.5 points, 0.7%, at 7,506.84 on Wednesday. The index of London large-caps closed down 36.57 points, 0.5%, at 7,558.34 on Tuesday.

At 0700 GMT on Wednesday there is some key UK inflation data.

According to FXStreet, Wednesday's consumer price inflation print is expected to cool to 3.8% annually in December, from 3.9% a month earlier.

The recent peak for annual inflation in the UK was 11.1% in October 2022, which the ONS estimated to be the highest since 1981. November's reading was the tamest since September 2021.

The data will help the Bank of England make its next interest rate decision on February 1. Before that, there is the European Central Bank decision on January 25, as well as the US Federal Reserve on January 31.

Overnight, there has been a Chinese gross domestic product reading. In China, the Shanghai Composite was down 1.5%, while the Hang Seng index in Hong Kong was down 3.8%.

China's economy last year grew at one of its slowest rates in more than three decades, official figures showed Wednesday, as it was battered by a crippling property crisis, sluggish consumption and global turmoil.

The figures were in line with expectations and even beat Beijing's target but will likely pile fresh pressure on officials to unveil more stimulus measures to kickstart business activity and get the country's army of consumers spending again.

China's National Bureau of Statistics revealed that gross domestic product expanded 5.2% to hit CNY126 trillion, or USD17.6 trillion, last year.

In the fourth quarter, GDP grew 5.2% annually, picking up from 4.9% in the third quarter.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 0.4%. The S&P/ASX 200 in Sydney closed down 0.3%.

Sterling was quoted at USD1.2598 early Wednesday, lower than USD1.2676 at the London equities close on Tuesday. The euro traded at USD1.0856 early Wednesday, lower than USD1.0894 late Tuesday. Against the yen, the dollar was quoted at JPY147.87, higher versus JPY146.81.

In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.6%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.2%.

Gold was quoted at USD2,018.44 an ounce early Wednesday, lower than USD2,038.07 on Tuesday.

Brent oil was trading at USD77.77 a barrel early Wednesday, lower than USD78.10 late Tuesday.

As well as UK data, in Wednesday's corporate calendar, there are US retail sales at 1330 GMT.

The local corporate calendar has trading statements from bookmaker 888 and miner Antofagasta.

By Sophie Rose, Alliance News senior reporter

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