LONDON: British shares ended higher on Tuesday led by gains in heavyweight energy and homebuilder stocks, while investors hoped that the central bank will keep interest rates at record lows despite a recent rise in inflation.

The benchmark FTSE 100 index climbed 0.5%, with British Land and Land Securities being the top gainers, up between 3% and 4.7% after J.P. Morgan raised its price target on both the stocks on expectations of higher footfalls once the economy reopens.

Britain's biggest seller of building materials Travis Perkins gained 6.7% after it raised its full year earnings outlook.

The domestically focussed mid-cap index rose 0.9%.

Britain's central bank is set to meet later this week to discuss its massive bond-buying program after inflation surged past its 2% target in May.

The FTSE 100 had surpassed the 7,000 mark in April on attractive valuations, easing Covid-19 lockdowns and a steady economic rebound, but the pace of gains has since slowed due to inflation concerns.

The energy index gained 2.14% with Royal Dutch Shell and BP being the top boost to the FTSE 100 index.

Among stocks, Melrose gained 2.5% on its plans to return about 730 million pounds ($1.01 billion) in cash to its shareholders.

Cardboard maker DS Smith fell 1.7%, the second biggest loser on the FTSE 100 index after reporting a 38% slump in annual pre-tax profit.

Britain's Senior Plc dropped 9.9% after it rejected a $1.2 billion buyout offer from Lone Star Global, saying the sweetened proposal undervalued the aircraft and car parts supplier.