London markets climb as slowing inflation cools interest rate expectations
London’s top index moved 0.62%, or 46.44 points, higher to finish at 7,486.91.
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London stocks soared on Wednesday after official figures showed inflation eased back by more than expected.
The FTSE 100 made gains for the third consecutive day after the Office for National Statistics revealed that Consumer Prices Index inflation slowed to 4.6% in October, after energy prices tumbled.
The reading – which was below analyst predictions of 4.7% – drove more speculation that interest rates are likely to be held in upcoming meetings by the Bank of England.
This knocked the pound, which then helped support strong performances by UK-based multinationals and banking firms.
London’s top index moved 0.62%, or 46.44 points, higher to finish at 7,486.91.
The pound was down O.55% at 1.242 US dollars and was 0.28% lower at 1.144 euros at market close in London.
Chris Beauchamp, chief market analyst at IG, said: “UK inflation has slowed sharply, relieving the pressure on the Bank of England to hike rates again.
“While bank stocks will have to get used to a world without a steady rise in interest income, the prospect of easing pressures on the UK economy continues to support bank stocks, which made further headway this afternoon.”
Elsewhere in Europe, the main markets were also positive as traders also welcomed a fall in the inflation rate in the US.
The Dax index was 0.86% higher for the day at the close and the Cac 40 closed up 0.33%.
Stateside, the Dow Jones and S&P continued their strong recent spell to open higher following the inflation data.
In company news, investors at pub group Fuller’s cheered an upbeat half-year update, as it looked ahead towards a strong Christmas after an 11% rise in bookings for the festive season.
Chief executive Simon Emeny said Fuller’s has made “strong progress” this year, despite the “challenging economic environment”.
Shares in the pub and hotel owner were up 66p to 640p at the close.
Experian was also a climber on Wednesday after the credit check business posted a rise in profits for the past six months.
The firm said pre-tax profits surged by 48% for the six months to September as sales grew across all its regions.
Shares finished the day up 202p to 2,883p.
Ocado shares spent much of the day in negative territory but jolted higher after the firm landed a deal to provide its technology to pharmaceutical distribution firm McKesson Canada.
The move marks Ocado’s first deal for its warehouse fulfilment tech outside of the grocery sector. Shares rose by 31.6p to 596.2p at the end of trading.
Meanwhile, the price of a barrel of Brent crude fell by 0.89% to 81.81 US dollars (£65.82) as markets were closing in London.
The biggest risers on the FTSE 100 were Experian, up 202p to 2,883p, St James’s Place, up 43.4p to 704p, Ocado, up 31.6p to 596.2p, IAG, up 7.15p to 161.05p, and Glencore, up 14.7p to 464.7p.
The biggest fallers on the FTSE 100 were Diageo, down 53p to 2,845.5p, Tesco, down 5.1p to 273.5p, Flutter Entertainment, down 190p to 12,585p, Pearson, down 14.4p to 950p, and Centrica, down 2.2p to 147.6p.
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