FTSE 100 Breaks Higher as UK Inflation Falls

The FTSE 100 surged 1.3% on Wednesday, breaking higher after a period of consolidation as investors welcomed a sharper-than-expected slowdown in UK inflation ahead of the BoE rate decision on Thursday.

Gains were broad-based across Europe, with Germany’s DAX up 0.4%, France’s CAC 40 rising 0.3% and the pan-European Stoxx 600 higher by 0.4%.

Inflation data provided the main catalyst for the rally. The rate of price growth fell far more quickly than forecast last month, strengthening expectations of another interest rate cut tomorrow. Prices rose by 3.2%, down from 3.6% in October and well below the 3.4% level expected by economists. 

The softer inflation print eased pressure on policymakers and lifted sentiment across equity markets.

Miners were among the strongest performers, supported by higher metals prices. Spot silver has jumped 3% while spot gold has gained 0.4%, helping to drive gains across the sector. 

Fresnillo climbed 3%, Anglo American added 2.8%, and Phoenix Group rose 3.5%. Elsewhere, HSBC advanced 2.95%.

However, not all stocks participated in the rally. Bunzl was the biggest faller on the index, sliding 4.7% after updating the market. 

The company said its 2025 adjusted operating profit is expected to be in line with initial expectations, despite ongoing macroeconomic challenges across its key end markets. 

Elsewhere, Admiral Group edged 0.5% lower and Marks & Spencer slipped 0.4%.