the FTSE100 ended the session up 0.46% at 7,476.72 and the FTSE250 was up 0.5% at 21,112.60.
Sterling was also in the green, most recently up 0.61% against the dollar to $1.3249 and up 0.6% against the euro to €1.2027.
“London’s financial sector liked Jerome Powell’s more aggressive tone,” said Danni Hewson, financial analyst at AJ Bell.
“The Fed Chair’s pledge that he and his cohorts would not back down if a more aggressive stance on fighting U.S. inflation was called for has received a welcome respite from what is beginning to look like an economic version of Groundhog Day felt.
“Banks are on the rise and big oil and many of the miners who have been enjoying the recent surge in commodity prices are down.”
Hewson added that the price of Brent crude has now leveled off without a possible EU ban on Russian energy being made and the clammy British motorist will be “pleased” to see both the lows and the highs in prices to pump.
“Prices are on everyone’s lips as speculation mounts as to how high UK inflation has really gotten and what exactly Rishi Sunak will do about it.
“The spring declaration is usually a rather slouchy affair, full of rhetoric and rather rabbit-poor, but the Chancellor is being lobbied on all sides to get his hat to the mail box tomorrow and deliver a ‘mini-budget’ that will somewhat defuse the ticking bomb , commonly referred to as the cost-of-living crisis.
“Death by a thousand cuts is how it feels for the average consumer, and companies of all shapes and sizes will be paying close attention to every fine print in notes sent out by the Treasury Department in the hours after Mr. Sunak’s speech.”
On the economic front, earlier official figures from the Office for National Statistics showed that UK government borrowing fell in February.
The gap between spending and revenue was £13.1bn – down £2.4bn from the same month last year but marking the second-highest borrowing for February since records began in 1993.
It was above expectations of £8.5bn, as well as beating the Office for Budget Responsibility’s forecast of £8bn.
The figures also showed borrowing was now £25.9 billion lower than OBR expected for the year so far and less than half of what was recorded at £138.4 billion last year.
Compared to February 2020, before the pandemic hit, borrowing increased by £12.8 billion.
Interest payments on government debt, meanwhile, rose 52.7% year-on-year to a record £8.2 billion last month amid rising inflation.
“While the Chancellor may benefit from a narrowing deficit as he prepares for Wednesday’s spring declaration, recent geopolitical developments point to a more difficult 2022-2023,” said Martin Beck, chief economic adviser to the EY Item Club.
“Rising energy and commodity prices mean inflation this year will be well above OBR forecast.
“By depressing real income growth, high inflation will weigh on economic activity and employment and have a negative impact on tax revenues.”
Beck said it would also further increase the interest cost of inflation-linked gilts.
“Borrowing may also be lifted as Chancellor responds to recent calls for more fiscal activism to ease pressure on the cost of living, such as B. the reduction in fuel tax or the increase in social benefits.
“With so many moving parts and uncertainty about how much of recent tax revenue strength will prove sustained, it is difficult to predict the medium-term fiscal outlook.
“But we won’t have to wait long for more clarity.”
Elsewhere, the proportion of UK manufacturers expecting price increases over the next three months hit a record high in March, an industry survey showed earlier, amid mounting inflationary pressures.
The Confederation of British Industry said the balance of manufacturers expecting price increases rose to +80 from +77 in February, the highest level since the question was first asked in the survey in 1975.
Total backlog, meanwhile, reached the record level of November last year at +26%, compared to +20% in February.
“It is positive to see that overall order books remained strong in March, with export orders being the most above-normal since March 2019,” said Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council.
“The production volume also grew significantly in the first three months of 2022.
“However, the Ukraine conflict has created further headwinds in an already challenging environment for the manufacturing sector.”
Crotty said the primary business focus is supporting the humanitarian crisis and assessing operations in Ukraine and Russia.
“But the shock in energy and other commodity markets, coupled with the potential for trade carryovers, will continue to put pressure on the cost of living.
“Manufacturers will look forward to the upcoming Spring Fiscal Event to provide support with these challenges.”
In equity markets, banks were well above the waterline, bolstered by overnight hawkish comments from US Federal Reserve Chair Jerome Powell.
HSBC increased by 3.15%, NatWest Group advanced 3.1%, Barclays increased by 2.59%, Lloyd’s Banking Group was 3.31% firmer and Standard Chartered gained 2.61%.
Speaking at the National Association of Business Economics conference, Powell said the Federal Reserve needs to act “quickly” to raise interest rates and potentially more “aggressively” to fight inflation.
Elsewhere athleisure dealers JD sports fashion rose 2.96% after well-received third-quarter earnings Nike on Wall Street.
IT infrastructure provider soft cat rose 3.9% after first-half earnings beat expectations and full-year earnings were expected to beat earlier estimates.
Sirius Properties gained 4.65% after announcing it would convert its UK business into a real estate investment trust from April 1.
On the other hand, B&Q owners kingfisher shed 6.32% after sales fell 8.1% in the first quarter of the current year as earnings for fiscal 2022 were reported a third higher.
rating platform trust pilot fell 14.83% after it reported an increase in full-year revenue but a widening of pre-tax losses to $26.6 million from $12.9 million.
car dealer group slipped 4.38% after announcing it would acquire Autorama – one of the UK’s largest new vehicle leasing marketplaces – for up to £200m.
In the broker change action TP ICAP up 12.02% after an upgrade to buy from hold at Shore Capital, while diploma was knocked down 5.78% by a downgrade from neutral to underweight in JPMorgan.
market mover
FTSE 100 (UKX) 7,476.72 0.46%
FTSE 250 (MCX) 21,112.60 0.50%
techMARK (TASX) 4,335.94 -0.16%
FTSE 100 – risers
Regulatory (PRU) 1,128.50p 4.11%
Aviva (AV.) 440.70p 3.38%
Lloyd’s Banking Group (LLOY) 50.24p 3.31%
HSBC Holdings (HSBA) 516.60p 3.15%
NATWEST GROUP PLC ORD 100P (NWG) 222.50p 3.10%
JD Sportswear (JD.) 153.30p 2.96%
Melrose Industries (MRO) 133.80 p 2.76%
Standard Chartered (STAN) 519.20p 2.61%
Legal and General Group (LGEN) 279.60 p 2.61%
Barclays (BARC) 172.86p 2.59%
FTSE 100 – Faller
Kingfisher (KGF) 272.90 p -6.32%
Auto Trader Group (AUTO) 646.80p -4.38%
Fresnillo (FRES) 720.00 p.p -3.88%
Strive Mining (EDP) 1,865.00p -2.36%
CRH (CDI) (CRH) 3,308.00p -2.27%
Right Movement (RMV) 659.20 p -1.88%
Rio Tinto (RIO) 5,709.00p -1.64%
Coca-Cola HBC AG (CDI) (CCH) 1,661.00p -1.63%
Croda International (CRDA) 7,400.00 p.p -1.60%
B&M European Value Retail SA (DI) (BME) 577.40 p -1.47%
FTSE 250 – risers
TP-Icap Group (TCAP) 133.30p 12.02%
Ultraelectronics Holdings (ULE) 3,342.00p 5.76%
Hammerson (HMSO) 32.05 p 5.08%
Lancashire Holdings Limited (LRE) 396.00p 4.93%
Sirius Immobilien AG (SRE) 126.00 p.p 4.65%
National Express Group (NEX) 234.00p 4.65%
Aston Martin Lagonda Global Holdings (AML) 945.80p 4.00%
Safestore inventory (SAFE) 1,320.00 p.p 3.94%
soft cat (SCT) 1,786.00p 3.90%
UK Commercial Property Reit Limited (UKCM) 84.00p 3.83%
FTSE 250 – Faller
Trustpilot Group (TRST) 137.80 p -14.83%
Diploma (DPLM) 2,582.00p -5.78%
Morgan Advanced Materials (MGAM) 304.00p -4.40%
Helios Towers (HTWS) 120.80p -4.13%
Hochschild Mining (HOC) 125.10p -3.77%
Auction Technology Group (ATG) 1,012.00 p.p -3.62%
3i infrastructure (3IN) 336.50 p -3.44%
Oxford Instruments (OXIG) 2,105.00 p.p -3.22%
Centamine (DI) (CEY) 86.74p -3.11%
Tullow Oil (TLW) 50.94p -2.86%
