UK stocks climb over 1% on cooler-than-expected inflation data

The UK’s benchmark indexes rose on Wednesday, on track for a three-day winning streak as cooler-than-expected October inflation data lifted investor sentiment, while a rise in prices of most commodities pushed mining and energy stocks higher.

The commodity-focused FTSE 100 was up 1.2% at 0838 GMT, touching the highest level in nearly a month. The mid-cap FTSE 250 gained 1.1%, hitting a two-month high.

British inflation cooled by more than expected in October as household energy prices dropped from a year ago while stubbornly high services sector price growth also eased, offering some relief to the Bank of England (BoE).

“The UK is finally shaking off its unwanted status as the global inflation outlier with today’s report showing that price growth has plunged by more than expected, after a frustrating three-month stall,” said Ben Laidler, analyst at trading and investment platform eToro.

The favourable inflation print reinforced expectations that BoE will be cutting interest rates by the middle of next year.

The upbeat sentiment spurred a rise in rate-sensitive stocks, with homebuilders adding 2.4% and the banks gaining 1.7%.

Precious metal miners advanced 2.6%, while industrial metal miners added 1.8%, as prices of most metals rose on a softer dollar and retreating bond yields. [GOL/] [MET/L]

Oil and gas shares climbed 0.3%, tracking higher oil prices after China’s factory output and retail sales beat expectations. [O/R]

Shares of Experian rose 6.0% after the world’s largest credit data company reported an increase in half-yearly profit, benefitting from sustained demand in key markets North America and Europe.

Fuller Smith & Turner’s shares jumped 4.2% after the pub group’s current bookings rose 11% from a year earlier, setting stage for a strong Christmas season.

British power generator and network operator SSE (LON:SSE) Plc topped the half-yearly earnings forecast, taking its shares up 3.1%.

UK stocks climb over 1% on cooler-than-expected inflation data