LONDON: London stocks ended higher after advancing for a fourth straight session on Wednesday as soft consumer prices data for July strengthened bets that the Bank of England will cut interest rates in its next policy meeting.
The blue-chip FTSE 100 and the midcap FTSE 250 index climbed 0.6% and 1%, respectively, and closed at a two-week high.
Most sectors closed with gains, with rate-sensitive sectors like homebuilders gaining 3.4% and were amongst the biggest gainers.
Meanwhile, industrial metal miners slipped nearly 1% as base metals were under pressure after a bigger-than-expected drop in Chinese lending worsened sentiment.
British consumer price inflation increased for the first time this year in July, official figures showed, but the rise was smaller than expected as services prices - closely watched by the Bank of England - rose less rapidly.
Money markets have raised their bets of BoE cutting rates next month. They now see a 40% chance of a 25-basis-point rate cut, up from a 36% possibility on Tuesday.
“Today’s numbers should do nothing to dissuade the BoE from continuing to be on a rate cutting path,” said Steve Sosnick, chief strategist at Interactive Brokers.
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