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London Stocks Edge Higher Ahead of UK Inflation Data, Bank of England Decision

London stocks rose slightly on Tuesday, as investors focused on upcoming domestic inflation data and the Bank of England’s policy decision this week. Gains were limited by a drop in Ashtead Group (LON) shares.

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The FTSE 100, a blue-chip index, increased by 0.3% to 8,164.21 points. The index has been fluctuating between 8,100 and 8,200 points for the past few weeks, with analysts predicting a steeper decline if it falls below the 8,100 mark. Similarly, the mid-cap FTSE 250 also rose by 0.3%.

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“The FTSE is struggling to move above the 8,200 level because we’re in a consolidation phase ahead of inflation data and the Bank of England decision. We’re waiting for the next catalyst,” said Fiona Cincotta, senior market analyst at City Index.

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Britain’s consumer price index (CPI) data is due on Wednesday, with the Bank of England’s decision to follow on Thursday. There is optimism that the inflation reading will fall to 2%, the Bank of England’s target, which could pave the way for an interest rate cut in August.

Citi analysts view the likelihood of a rate cut as finely balanced between August and September. They expect a policy tone that suggests a weak cutting bias, while remaining dependent on upcoming economic data.

Among individual stocks, Whitbread (LON) saw a 3.4% rise after the Premier Inn owner reiterated its annual forecast. The travel and leisure sector led gains among FTSE 350 sectors, climbing 1.6%, with all FTSE 350 sectors in positive territory for the day.

Ashtead Group was the biggest loser on the FTSE 100, dropping 4.8% after the equipment rental firm projected slower growth in annual group rental revenue for fiscal 2025.

Across the Atlantic, investors are eagerly awaiting U.S. retail sales data expected later on Tuesday, as well as insights from several Federal Reserve officials scheduled to speak throughout the week.

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