- FTSE 100 up 0.7%, FTMC 250 up 0.3%
- British inflation at 1.7% in September
- Quilter rises after Q3 results
Oct 16 (Reuters) - The UK's main stock indexes jumped on Wednesday after a key inflation reading showed British inflation fell more than expected, boosting the case for a rate cut by the Bank of England.
The blue-chip FTSE 100 rose 0.7% by 0719 GMT, while the mid-cap FTSE 250 index gained 0.3%. Both indexes hit more than one-week highs.
Precious metal miners led sectoral gains, rising 2.1% in tandem with gold prices that ticked up 0.2%.
The rate-sensitive real estate sector ticked up 1.3%.
Consumer price index data showed British inflation fell more-than-expected to an annual rate of 1.7% in September from 2.2% in August. A Reuters poll had expected CPI to drop to 1.9%.
The pound fell 0.6% to the dollar, also acting as a tailwind for British equities.
Investors currently see about an 81% chance the Bank of England will cut rates at its next meeting on Nov. 7.
"Today's inflation print will reassure members of the Monetary Policy Committee that the tide is turning in the battle against inflation," Aaron Hussein, global market strategist at J.P. Morgan Asset Management, said.
"A quarterly cadence of cuts appears most likely. Investors expecting the Bank to keep pace with its peers around the world are therefore likely to be disappointed."
Non-life insurers lost 1.7% after the Financial Conduct Authority began a review of the premium finance market, amid fears that consumers who borrow to pay for motor and home insurance may not be receiving fair or competitive deals.
Quilter gained 5.7% after the British wealth manager reported higher third-quarter assets under management.
Burberry lost 4.1%, dragging the personal goods sector to the bottom, after the luxury brand's peer LVMH reported a 3% fall in third-quarter sales.
Reporting by Pranav Kashyap in Bengaluru; Editing by Mrigank Dhaniwala
Source: Reuters