Easyjet and Centrica lead FTSE 100 higher

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Shares in Easyjet flew 5.3% higher after analysts at Credit Suisse raised its rating on the airline to "outperform" from "neutral".

Shares in British Gas owner Centrica rose 3% following a report that it could be a bid target.

A report on the Wall Street Wires website said there was talk that the company had attracted the interest of a couple of potential buyers.

The two companies pushed the FTSE 100 to close up 6.15 points at 7,343.43.

Royal Mail was the biggest FTSE 100 faller, down 3.3% at 410.3p

In the FTSE 250, shares in homewares retailer Dunelm rose 3.7% after it reported strong fourth quarter trading.

Total revenues for the 13 weeks to 1 July rose 17.7% to £340m, helped by the company's takeover of home improvement products retailer Worldstores. Like-for-like sales in the quarter were up 3.8%.

However, Dunelm said it expected full-year pre-tax profits to be between £109m and £111m, down from £128.9m last year.

On the currency markets, the pound fell 0.7% against the dollar to $1.2885 following the release of several weaker-than-expected pieces of economic data.

Office for National Statistics data showed that manufacturing and construction output fell in May, and the trade deficit widened.

Against the euro, sterling was down 0.4% at 1.1305 euros.