London stocks gain on optimism ahead of UK inflation data, cenbank decision

By Pranav Kashyap and Purvi Agarwal

(Reuters) -London's FTSE 100 bounced back on Tuesday, with investors optimistic ahead of key domestic inflation data and the Bank of England's policy decision this week, while strength in Hargreaves Lansdown added to gains.

The blue-chip FTSE 100 closed 0.6% higher at 8,164.21 points, after three straight sessions of losses.

The benchmark has been drifting between the 8,100 and 8,200 levels for the past few weeks, with steeper declines expected if it dips below the 8,100 mark.

"We're seeing a consolidation phase ahead of inflation data and the BoE decision. We're waiting for the next catalyst," Fiona Cincotta, senior market analyst at City Index said as the index's struggled to move past the 8,200 level.

Meanwhile, a lesser-than-expected rise in U.S. retail sales revived some hopes of a September rate cut by the Federal Reserve.

Utilities led broader gains in the British market, with a 2.1% rise, while household goods and home construction stocks declined 1.0%, the most among peers.

Investor focus is now on the domestic consumer price index (CPI) numbers on Wednesday, the last crucial dataset ahead of the BoE's decision on Thursday.

"Everybody will be looking at the voting patterns on the nine person Monetary Policy Committee to see if there's any change in the 7-2 vote for no change," said Russ Mould, investment director at AJ Bell.

"There's some hope that more members will lean towards cutting; markets will take them as green lights for rate cuts in August or September."

The mid-cap FTSE 250 also rose 1.2%, marking its best day in over a month.

Among individual stocks, Ashtead Group dropped 2.0% after the equipment rental firm said it had no immediate plans for a U.S. listing and forecast a slower revenue growth for fiscal 2025.

Meanwhile, Hargreaves Lansdown rose 5.3% to the top of the FTSE 100, after the investment platform said it was set to agree to a 5.41 billion pound ($6.87 bln) takeover by a CVC-led consortium.

(Reporting by Pranav Kashyap in Bengaluru; Editing by Sonia Cheema and Mrigank Dhaniwala)