FTSE 100 Closes Higher Amid Inflation Data and Rate Hike Speculation

The UK's FTSE 100 index closed higher on Wednesday, following the release of fresh inflation data ahead of Thursday's Bank of England interest-rate decision.

UK inflation rose to 3.1% in August from 2.9% in July, matching expectations. Core inflation remained unchanged at 2.6%, with transport costs, particularly motor fuels, driving the increase.

Berenberg attributed the rise to higher energy prices rather than broader domestic inflation pressures, and now expects the Bank of England to raise rates in November if elevated energy costs persist.

The FTSE 250 index gained 1.06% to 24,070.20, while the FTSE 100 rose 0.28% to 10,688.47.