FTSE 100 boosted by low inflation

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FTSE 100 Index

Last Updated at 23 Nov 2017, 15:17 GMT *Chart shows local time FTSE 100 intraday chart
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(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 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.

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.

"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.

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.