ondon’s FTSE 100 has had its best month since April as hopes that UK inflation has turned a corner boosted the mood among investors.
The UK’s top index ended July about 2.2% higher than the end of June, its best performance in two months.
It also started the week in positive territory, as markets prepare for another expected interest rate hike when Bank of England policymakers meet on Thursday.
Michael Hewson, chief market analyst for CMC Markets UK, said: “Both the FTSE 100 and FTSE 250 have fared reasonably well, with the FTSE 100 closing at a two-month high, with house builders seeing a bit of a rebound this month as interest rate rise expectations eased back from the peaks of a few weeks ago.”
Energy stocks and miners were among the companies seeing gains on Monday after the Prime Minister granted 100 new North Sea oil and gas licences and supported a carbon capture project in Scotland.
It just about offset losses for supermarket and food stocks, ahead of an overhaul of the UK’s alcohol duty system which is set to push up prices of bottles from August.
The blue-chip index closed 5.14 points higher, or 0.07%, at 7,699.41.
Elsewhere in Europe, Germany’s Dax closed 0.14% lower and France’s Cac 40 closed 0.29% higher.
Over in the US, it was a slow start to the week for traders, with both the S&P 500 and Dow Jones flat when European markets closed.
The pound was up by 0.1% against the US dollar to 1.2856, and up by 0.1% against the euro to 1.1667.
The price of Brent crude oil edged up by 0.64% to 85.53US dollars per barrel.
In company news, bootmaker Dr Martens enjoyed a share price boost amid reports that an activist investor has quietly built its stake in the firm.
Sparta Capita reportedly accumulated more stock in the retailer, which has suffered a hit from warehousing issues and supply chain delays in recent months, in efforts to improve its share value and financial performance.
While neither companies confirmed the reports, investors reacted positively and its share price closed 4.5% higher.
Meanwhile, shares in BT Group dipped after the group named Allison Kirkby as its new chief executive to take over from Philip Jansen when he retires by the end of January.
Ms Kirkby will be the first woman to lead the telecom giant in its more than 170-year history. She has been a non-executive director of the firm since 2019 and has worked in the sector for more than a decade.
BT’s share price slipped by 1.7% on Monday.
In other leadership news, Capita announced the retirement of its boss Jon Lewis after six years at the helm, who is due to step down towards the end of the year. Shares in Capita were down 1.3% at close.
The biggest risers on the FTSE 100 were IAG Group, up 5.95p to 171.1p, Centrica, up 3.85p to 138.05p, Weir Group, up 45p to 1,835p, Scottish Mortgage Investment Trust, up 15.8p to 735.8p, and Rightmove, up 11.6p to 570.4p.
The biggest fallers on the FTSE 100 were Rolls-Royce Holdings, down 8.45p to 184.85p, Ocado Group, down 38p to 938.4p, Coca-Cola HBC, down 63p to 2,292p, Hargreaves Lansdown, down 22p to 851.4p, and J Sainsbury, down 5.2p to 277.4p.