By Pranav Kashyap and Purvi Agarwal
(Reuters) -London's FTSE 100 closed higher on Wednesday as investors digested a key inflation report that showed a sluggish decline in services inflation, while industrial miners tracking higher copper prices offset declines.
The blue-chip FTSE 100 closed 0.2% higher, above the crucial 8,200 level for the first time in a week, while the mid-cap FTSE 250 was down 0.1%.
The pound gained 0.1% against the dollar and was last at $1.2723. [GBP=D3]
Investors grappled with a slower-than-anticipated decline in services price inflation in May, which the BoE believes offers a clearer view of medium-term inflation risks, although headline inflation fell to the BoE's 2% target.
"The market's pretty sanguine following today's data as there is something for everyone in data. It reinforces the probability that we'll see at least one rate cut this year, maybe more depending on how subsequent data progresses," said Jaymeen Patel, senior investment product specialist at St. James Place.
Investors are unanimously seeing a rate cut only in September now. [0#BOEWATCH]
"If this stickiness in domestic price pressures continues, alongside ongoing resilience in economic activity, an August rate cut could well be off the table too," Zara Nokes, global market analyst at J.P. Morgan Asset Management, said.
In the market, rate-sensitive sectors like household goods and home construction and real estate stocks were the biggest losers with a 2.9% and 1.9% decline respectively.
However, industrial miners rose 0.8% in tandem with copper prices that hit seven-week highs. [MET/L]
Investor eyes are now trained on the central bank's monetary policy decision on Thursday.
Among individual stocks, telecom infrastructure firm Helios Towers was the top loser on the mid-cap index, falling 7.8% after a discounted secondary share placement.
Anglo American (JO:AGLJ) gained 1.7% after the miner said it expects a 30% decline at its key Chile copper mine in 2025.
Meanwhile, homebuilder Berkley Group fell 6.3% to the bottom of the benchmark index despite lifting its earnings outlook for 2025.
U.S. markets were shut for a public holiday on Wednesday.