The internationally-focused FTSE 100 edged higher on Tuesday, buoyed by a rise in commodity-linked stocks, while a strengthening pound after domestic wage data limited further gains.

The blue-chip FTSE 100 ended 0.1% higher, and the domestically-focused FTSE 250 midcap index added 0.6%.

Sterling firmed to its strongest level in over a year against both the dollar and the euro after a key measure of British wages rose at the joint fastest pace on record, raising concerns that the Bank of England would continue to hike interest rates.

“Inflation isn’t really proving transitory or isn’t rolling over in quite the way some would have hoped, and in the UK it’s actually a little bit stickier than on a global basis,” said Wes McCoy, investment director at Abrdn.

“So our need to put up interest rates more aggressively coupled with weaker economic environment globally means a difficult economic picture.”

Deutsche Bank now expects the BoE to raise interest rates by half a percentage point at its August meeting, up from 25 basis points earlier.

UK’s FTSE 100 gains on energy boost; real estate stocks slip

Investor focus would remain on crucial U.S. inflation data due on Wednesday to assess the state of the world’s largest economy and where the Federal Reserve stands on monetary policy tightening.

Industrial metal miners added 1.3% as most base metal prices rose on a weaker dollar, and helped by easing property market policies in China.

Additionally, oil stocks added 0.9%.

British Land rose 3.8% after the commercial property firm said it still expects strong operational momentum despite macroeconomic uncertainty.

The real estate sector advanced 2.2%.

Dowlais Group slid 5.9% after Citigroup initiated coverage on the specialist engineering group with a “sell” rating, dragging the automobile sector down 3.5%.

Meanwhile, a British Retail Consortium survey showed retail spending increased by 4.9% in annual terms in June.