British Equities Surge Amid Speculation of Interest Rate Cuts

British equities rose, bolstered by potential U.S. interest rate cuts. The FTSE 100 indexed 0.9% higher, while miners and aerospace sectors saw notable gains. Easing inflation may relieve Finance Minister Rachel Reeves post-tax hikes, though UK's economic growth fell short of expectations. Global markets also rallied on U.S. inflation news.

British equities experienced a notable rise on Thursday, continuing a trend of strong performance from the previous session. This surge comes as markets anticipate potential interest rate cuts by the U.S. Federal Reserve following a lower core inflation reading.

The FTSE 100, Britain's blue-chip index, climbed 0.9% as of 1017 GMT, reaching its highest level in over a month. Additionally, the domestically focused FTSE 250 midcap index increased by 0.2%. Notably, precious metal miners surged 3.2% with gold prices remaining near monthly highs, and the aerospace and defense sector gained 2.1% driven in part by a 2.5% rise in Rolls-Royce shares after an improved price target from Morgan Stanley.

Finance Minister Rachel Reeves may welcome this positive development after a prior market sell-off tied to announced tax increases on businesses. Simultaneously, Britain's economic output saw a return to growth in November, albeit below expectations, right after the tax adjustment. Global markets were similarly buoyed by eased U.S. core inflation figures, keeping potential Federal Reserve rate cuts plausible. In related news, Burberry shares jumped 9% amid luxury sector optimism, while Trustpilot surged 16% following a profit forecast update.

(With inputs from agencies.)