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FTSE 100 boosted by low inflation | FTSE 100 boosted by low inflation |
(about 5 hours later) | |
(Close): The FTSE closed higher after lower-than-expected inflation data made the prospect of an early rise in interest rates even less likely. | |
The UK inflation rate fell to 1% in November - a 12-year low - down from 1.3% in October, with cheaper fuel a key factor behind the change. | The UK inflation rate fell to 1% in November - a 12-year low - down from 1.3% in October, with cheaper fuel a key factor behind the change. |
The news sent the FTSE 100 higher, rising 149.11 points to 6331.83. | |
Earlier the index had fallen as oil-related stocks were hit by the continuing drop in crude prices. | Earlier the index had fallen as oil-related stocks were hit by the continuing drop in crude prices. |
The price of Brent crude fell below $60 a barrel early on Tuesday and then continued to decline, eventually dropping below $59 for the first time since May 2009. | The price of Brent crude fell below $60 a barrel early on Tuesday and then continued to decline, eventually dropping below $59 for the first time since May 2009. |
"Volatility is likely to continue in the short term as the full effects of a lower oil price ripple through financial markets," said Laith Khalaf, a senior analyst at Hargreaves Lansdown. | "Volatility is likely to continue in the short term as the full effects of a lower oil price ripple through financial markets," said Laith Khalaf, a senior analyst at Hargreaves Lansdown. |
"While there are positives to draw from a lower price, these are perhaps further away and less tangible than the obvious negative impact on oil-related stocks." | "While there are positives to draw from a lower price, these are perhaps further away and less tangible than the obvious negative impact on oil-related stocks." |
Mining shares were also hit by disappointing figures from China, with the latest survey of the manufacturing sector indicating that activity has contracted this month. | Mining shares were also hit by disappointing figures from China, with the latest survey of the manufacturing sector indicating that activity has contracted this month. |
BT shares rose 1.9%. On Monday, the firm said it was in talks to buy the EE mobile phone network for £12.5bn. | |
On the currency markets, the pound rose 0.65% against the dollar to $1.5739 and increased 0.08% against the euro to €1.2584. |