Stock indexes jump following inflation data

The blue-chip FTSE 100 climbed nearly 1% to close at a near four-week high, while the mid-cap FTSE 250 index jumped 0.9% to hit a two-week closing high

The UK's main stock indexes jumped on Wednesday after a key inflation figure showed British inflation dropped more than expected, boosting the case for a rate cut by the BoE.

The blue-chip FTSE 100 climbed nearly 1% to close at a near four-week high, while the mid-cap FTSE 250 index jumped 0.9% to hit a two-week closing high.

Precious metal miners led sectoral gains, gaining 3.3%, while the rate-sensitive real estate sector advanced 3%.

Consumer price index (CPI) data showed British inflation declined more than expected to an annual rate of 1.7% in September from 2.2% in August.

The pound dropped 0.6% to the dollar, another tailwind for British equities.

Investors currently see almost a 90% probability the BoE will reduce rates at its next meeting on November 7.

Today's inflation print will reassure members of the Monetary Policy Committee (MPC) that the tide is turning in the battle against inflation, according to Aaron Hussein, global market strategist at J.P. Morgan Asset Management.

A quarterly cadence of cuts seems most likely. Investors expecting the Bank to keep pace with its peers around the world are therefore likely to be disappointed, Hussein said.

Non-life insurers slipped 1.7% after the Financial Conduct Authority (FCA) began a review of the premium finance market, amid concerns that consumers who borrow to pay for motor and home insurance may not be receiving fair or competitive deals.

Quilter added 4.7% after the British wealth manager reported higher third-quarter assets under management (AUM).

Tate & Lyle climbed 8.3% after the Financial Times reported that private equity firm Advent International is preparing a takeover offer for the UK-based food and beverage ingredients maker.