FTSE 100 Joins European Rally; UK Inflation Jumps More than Expected

11:52 AM EDT, 10/21/2026 (MT Newswires) -- London's FTSE 100 closed 0.19% higher on Wednesday, joining a Europe-wide rally, as investors assessed stronger-than-expected inflation and other economic releases. Britain's annual inflation rate climbed to 3.5% in September from 3.1% in August, according to data from the Office for National Statistics. Analysts expected a 3.4% rate for the month. On a monthly basis, consumer prices were 0.4% higher, compared with the 0.5% gain earlier and the market forecast of a 0.3% uptick. Meanwhile, annual core inflation rose to 2.8%, as expected, from 2.6%. "A [Bank of England] rate hike on November 5 is now seen to be a "sure thing" by an OIS market that is implicitly assigning a 95% probability to the event," Macquarie strategists said. "That also follows on several BoE [monetary policy committee] members saying last week that the risks of UK inflation coming off of higher energy prices are mounting - and strengthening the case for multiple rate hikes." Meanwhile, public sector net borrowing in the UK, excluding public sector banks, stood at 24.52 billion pounds sterling in September, up from the revised 17.25 billion pounds sterling earlier and market expectations of 23.8 billion pounds as spending, including higher debt interest costs, exceeded government income. Debt at the end of September surpassed 3 trillion pounds for the first time. Amid rising energy rates and oil supply concerns, the UK's energy secretary cleared the production of gas at the licensed Jackdaw field in the North Sea, enabling supply to British homes and businesses from as early as the end of October. Separately, the British government will launch a new Energy Wealth Fund, with an initial investment of 2 billion pounds sterling. Over time, tax revenues from North Sea oil and gas will also flow into the fund for investment in renewable and low-carbon energy projects. In corporate news, Aberdeen Group (ABDN.L) dropped 4.09% to become the blue-chip index's worst performer even after logging a year-over-year growth in assets under management and administration for the third quarter. The British investment company expects to achieve its adjusted operating profit target of at least 300 million pounds in 2026. Miner Fresnillo (FRES.L), down 2.12%, reported a yearly decline in attributable production of silver and gold for the third quarter to 10.3 million ounces and 135,053 ounces, respectively, from 11.7 million ounces and 151,256 ounces.