2:45 PM London – The UK indexes surged more than 1% and annual inflation eased to a 30-month low in May and home prices increased in April. Cable & Wireless secured shareholders approval for the £1.04 billion acquisition offer from Vodafone.
The UK indexes advanced tracking the gains in European markets on the hopes that European leaders and central bankers are working on a plan to halt the rising contagion in the euro zone.
In London, the benchmark index FTSE 100 gained 70.33 or 1.3% to 5,561.53 and the pound edged higher to $1.5671.
UK Annual Inflation Slows
The UK annual inflation eased to 2.8% in May to the lowest since November 2009, the Office for National Office said today. Nonetheless, inflation continues to hover above the 2% target.
On a monthly basis, consumer prices fell 0.1% in May compared to the 0.6% rise in April.
Core inflation that excludes energy, food, alcoholic beverages and tobacco rose to 2.2% in May annually from 2.1% in April.
Retail price annual inflation declined to 3.1% in May from 3.5% in April, the smallest since December 2009.
UK Home Prices Rise
Home prices in the UK increased in April, the Office for National Statistics said today.
The ONS home price index rose 1.4% annually in April following a 0.4% drop in March.
The annual increase reflected growth of 1.7% in England, which was offset by declines in Wales, Scotland and Northern Ireland.
Prices of new homes rose 5.1% in the year to April.
Gainers & Losers
BG Group plc advanced 3% to 1,267.50 pence after the natural gas company said it issued hybrid bonds of $1.57 billion.
Cable & Wireless Worldwide Plc dipped a fraction to 37.76 pence after the telecommunications company announced that shareholders approved the merger with Vodafone Group Plc.
Vodafone agreed to buy CWW on April 23 in an all-cash deal valued at about £1.04 billion or $1.68 billion.
Home Retail Group plc soared 25.1% to 93 pence after the home and general merchandise retailer reported a 0.2% growth in its first quarter total sales at Argos to £819 million, and comparable sales slipped 0.2%. Total sales at Homebase dropped 8.1% to £21 million and comparable sales declined 8.3% in the quarter.
Imagination Technologies Group plc slumped 6.6% to 453.70 pence after the chip designer reported fiscal year 2012 group revenue increased 30% to £127.50 million with strong demand for technologies.
For the full year, the chip designer reported a 74% increase in pre-tax profit to £28.5 million.