British stocks rise as pound strengthens, rate cut hopes fade

British stocks rise: British stocks climbed on Wednesday, supported by industrial metal miners, while the pound strengthened following a slower-than-expected decline in inflation, reducing expectations of an imminent rate cut by the Bank of England.

The FTSE 100 and the mid-cap FTSE 250 both gained 0.5 per cent after steep losses on Tuesday.

Industrial metal miners surged 2.7 per cent, with Rio Tinto leading the pack with a 3 per cent increase, driven by rising iron ore futures.

However, the aerospace and defence sectors faced losses, dropping nearly 1 per cent amid ongoing geopolitical risks in the Middle East.

The UK's inflation slowed to 3.2 per cent in March, slightly above economists' expectations of 3.1 per cent.

"We are in that consolidation phase and in between narratives. The market is shifting from a soft landing to higher for longer, creating a little bit of noise," said Lilian Chovin, head of asset allocation at Coutts.

Traders now expect a 38-basis-point rate cut by the Bank of England in 2024, with the first rate cut possibly in November.

US Federal Reserve Chair Jerome Powell's comments on maintaining restrictive monetary policy dampened hopes for significant rate reductions this year.

ASOS advanced 5 per cent after appointing a new CFO and maintaining its full-year profit forecast.

Burberry gained 2 per cent following LVMH's first-quarter sales meeting forecasts.

Entain rose 3.6 per cent after reporting better-than-expected first-quarter online gaming revenue.

(with Reuters inputs)