Source: Sharecast
The FTSE 100 closed up 0.7% at 10,724.86, while Brent crude was up 0.4% at $106.10 a barrel and West Texas Intermediate was 1.3% higher at $95.36.
Data released earlier by the Bureau of Labor Statistics showed the US consumer price index ticked up 3.7% on the year in September, from 3.4% in August. This was above the 3.6% expected by economists. Core inflation - which excludes food and energy - rose to 2.6% year-on-year last month from 2.4% in August, also above expectations, of 2.5%.
Danni Hewson, head of financial analysis at AJ Bell, said: "The CME’s Fedwatch tool shows that expectations of a rate hike at the US central bank’s next meeting have jumped to over 40%, with investors now more than 90% certain a hike will come in December if not before."
The data hit sentiment on Wall Street, but in London investors were taking comfort from the latest comments from Huw Pill, who signalled that interest rates were unlikely to rise four times in the next 12 months as the market is pricing in.
"The MPC member has voted to hike rates at the past four meetings, but despite making it clear he believes the Bank does need to act swiftly to prevent inflation from spiralling, his comments on the fringes of this week’s IMF meetings have bolstered investor sentiment," said Hewson.
"At this point last year markets had expected that base rate would keep falling. Now, the elevated price of oil due to the ongoing conflict in the Middle East has turned that view on its head, and there had even been some expectation that rates could top out at 4.75% next year.
"The Bank’s chief economist was also clear that the UK faces a difficult few months and that the case for a 100-basis point hike could change if second round effects take hold."
Pill’s comments boosted the rate-sensitive housebuilding sector, with Barratt Redrow the top performer on the FTSE 100, while Bellway, Taylor Wimpey and Persimmon also racked up strong gains.
Elsewhere, Big Yellow rallied after activist investor Ancora Holdings Group said the self-storage company should explore a sale.
Chemring rose after saying that its Roke subsidiary has signed a multi-year strategic partnering agreement with a major US prime contractor worth at least $170m over the first five years.
Rio Tinto nudged lower despite saying it remains on track to unlock around $5bn of capital by the end of 2026 after a strong operational performance helped third-quarter iron ore sales from its Pilbara operations beat market expectations. The mining giant shipped 85.7m tonnes of iron ore in the three months to 30 September, up 2% year-on-year and ahead of analyst forecasts of 84.41m tonnes.
Softcat slid even as it hailed another year of "exceptional" growth, posting a rise in profit and gross invoiced income, driven by a "very strong", broad-based performance.
Market Movers
FTSE 100 (UKX) 10,724.86 0.70%
FTSE 250 (MCX) 24,360.77 0.09%
techMARK (TASX) 6,201.21 0.73%
FTSE 100 - Risers
Barratt Redrow (BTRW) 304.10p 4.04%
GSK (GSK) 1,816.00p 3.59%
Burberry Group (BRBY) 1,074.00p 3.52%
AstraZeneca (AZN) 12,300.00p 3.40%
Land Securities Group (LAND) 635.50p 3.25%
Babcock International Group (BAB) 913.40p 2.95%
Unilever (ULVR) 4,829.00p 2.52%
British Land Company (BLND) 407.80p 2.15%
Imperial Brands (IMB) 2,778.00p 2.13%
BAE Systems (BA.) 1,899.00p 2.10%
FTSE 100 - Fallers
Fresnillo (FRES) 2,590.00p -4.64%
Computacenter (CCC) 5,465.00p -4.04%
Airtel Africa (AAF) 278.60p -2.99%
Standard Chartered (STAN) 2,109.00p -2.59%
Balfour Beatty (BBY) 827.50p -2.53%
Admiral Group (ADM) 3,654.00p -2.25%
ICG (ICG) 1,757.00p -1.84%
The Sage Group (SGE) 1,073.00p -1.51%
WPP (WPP) 388.60p -1.47%
Abrdn (ABDN) 236.40p -1.34%
FTSE 250 - Risers
Big Yellow Group (BYG) 842.00p 5.38%
Bellway (BWY) 2,046.00p 4.60%
Travis Perkins (TPK) 594.00p 4.21%
XP Power Ltd. (DI) (XPP) 2,030.00p 3.78%
Taylor Wimpey (TW.) 75.38p 3.23%
Raspberry PI Holdings (RPI) 630.50p 3.02%
Great Portland Estates (GPE) 319.60p 2.96%
Persimmon (PSN) 1,255.00p 2.83%
QinetiQ Group (QQ.) 466.60p 2.82%
Vistry Group (VTY) 227.40p 2.80%
FTSE 250 - Fallers
Softcat (SCT) 1,719.00p -10.09%
Keller Group (KLR) 3,092.00p -5.27%
Close Brothers Group (CBG) 366.20p -5.23%
Bridgepoint Group (Reg S) (BPT) 390.00p -3.94%
Endeavour Mining (EDV) 3,991.00p -3.41%
Hochschild Mining (HOC) 492.20p -2.82%
IntegraFin Holding (IHP) 358.50p -2.71%
Wizz Air Holdings (WIZZ) 980.50p -2.63%
Bytes Technology Group (BYIT) 428.00p -2.51%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,458.00p -2.28%