London stocks closed higher on Wednesday thanks to a boost from precious metal miners, while hawkish comments by Bank of England Chief Economist Huw Pill eased bets on an interest rate cut in August.
The blue-chip FTSE 100 index closed 0.7% higher, after logging its worst day in nearly a month on Tuesday.
Also capping gains for the dollar earners was a rise in the pound as BoE’s Pill focused on strong price pressures in the economy and the timing of a first interest rate cut was an “open question,” addressing a think tank in London.
Investors are now expecting roughly a 50% chance of an initial rate cut in August, down from 62% before Pill’s speech. The yield on Britain’s two-year gilt hit a session high of 4.125% post the speech.
On Monday, outgoing BoE Monetary Policy Committee member Jonathan Haskel said he was not yet ready to vote for rate cuts. Catherine Mann, another external MPC member, is due to speak at 1630 GMT.
London stocks fall as financials and energy stocks drag
Investors are also looking to Britain’s GDP numbers due on Thursday.
The domestically-focused FTSE 250 index jumped 1.4%, led by SSP Group’s 10.4% rise after the restaurant operator stuck to its fiscal year forecasts.
Travel and leisure stocks rose 2%, also boosted by SSP Group.
Precious metal miners advanced 3.2% as gold prices steadied ahead of a crucial U.S. inflation report later this week.
Travis Perkins climbed 7.1% after the construction firm named Pete Redfern as its next CEO.
IAG gained 3% after Morgan Stanley upgraded the British Airways owner to “Overweight” from “Underweight”.
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