LONDON, June 23 ― British shares ended higher yesterday led by gains in heavyweight energy and homebuilder stocks, while investors hoped that the central bank will keep interest rates at record lows despite a recent rise in inflation.

The benchmark FTSE 100 index climbed 0.5 per cent, with British Land and Land Securities being the top gainers, up between 3 per cent and 4.7 per cent after JP Morgan raised its price target on both the stocks on expectations of higher footfalls once the economy reopens. Britain's biggest seller of building materials Travis Perkins gained 6.7 per cent after it raised its full year earnings outlook.

The domestically focussed mid-cap index rose 0.9 per cent.

Britain's central bank is set to meet later this week to discuss its massive bond-buying programme after inflation surged past its 2 per cent target in May.

"Investors are slowly getting used to the idea that all of this talk about the prospect of rate rises and tapering is merely finessing a timeline... when it comes to withdrawing stimulus and potentially raising rates,” said Michael Hewson, chief market analyst at CMC Markets UK.

The FTSE 100 had surpassed the 7,000 mark in April on attractive valuations, easing Covid-19 lockdowns and a steady economic rebound, but the pace of gains has since slowed due to inflation concerns.

The energy index gained 2.14 per cent with Royal Dutch Shell and BP being the top boost to the FTSE 100 index.

Among stocks, Melrose gained 2.5 per cent on its plans to return about £730 million (RM4.2 billion) in cash to its shareholders.

Cardboard maker DS Smith fell 1.7 per cent, the second biggest loser on the FTSE 100 index after reporting a 38 per cent slump in annual pre-tax profit.

Britain's Senior Plc dropped 9.9 per cent after it rejected a US$1.2 billion buyout offer from Lone Star Global, saying the sweetened proposal undervalued the aircraft and car parts supplier. ― Reuters