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Mining stocks lift ftse 100

written by Bella Palmer

The blue-chip index rose 0.4%, while the domestically-focused midcap index FTSE 250 gained 0.5% after three straight days of declines

UK's FTSE 100 edged higher on Tuesday, lifted by miners, while investors looked ahead to a statement from the Bank of England's chief economist for further details on the central bank's response to the recent market turmoil.

The blue-chip index rose 0.4% by 0817 GMT, while the domestically-focused midcap index FTSE 250 gained 0.5% after three straight days of declines. Sterling, too, rebounded after a battering that began on Friday when markets were spooked by Britain's gambit of relying on unfunded tax cuts to spur growth, which also sent short-term gilt yields up 100 bps in two days.

All eyes are now on a policy forum scheduled at 1100 GMT where the BoE's chief economist, Huw Pill, is expected to talk about central bank's response to the recent turmoil.

I'm expecting more reassuring by the Bank of England but not any news of any action, said Giles Coghlan, chief market analyst at HYCM.

The bank will want to think very carefully before it acts and will only want to take a move that will really be assured will work. Hiking interest rates now won't necessarily prop up the pound for long. Former BoE Deputy Governor Charlie Bean said he would likely have advised the central bank to call an emergency meeting, and that the lesson of emergency interventions was ‘you go big, and you go fast’.

Mining stocks advanced 1.5%, tracking metal prices as a softer dollar made the greenback-priced metal cheaper to holders of other currencies.

Biffa Plc surged 28.3% after the British waste-management company agreed to be taken over by private equity firm Energy Capital Partners (ECP) in a 1.3-billion-pound deal.

Burberry Group gained 2.4% after rating agency Moody's changed its outlook on the luxury company to 'positive' from 'stable'.


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