Investing.com -- British stocks rose on Wednesday as investors looked past hotter-than-forecast U.S. core inflation and an IMF warning that higher defence spending will force UK departmental cuts, while a Bank of England policymaker questioned market bets on four rate hikes.
The FTSE 100 gained 0.70%. Germany's DAX rose 0.25% and France's CAC 40 gained 0.58%. Sterling was down 0.81% at $1.3147, as of 12:13 ET (17:13 GMT).
U.S. consumer prices rose 0.6% in September, the Bureau of Labor Statistics said, lifting annual inflation to 3.7% from 3.4%, in line with the 3.7% consensus.
Core prices rose 0.3% on the month versus a 0.2% forecast, and the annual core rate rose to 2.6% from 2.4%, above the 2.5% expected. Gasoline, up 9.1%, accounted for over half the monthly increase.
BoE chief economist Huw Pill, speaking at the IMF conference in Bangkok, said he was "sceptical" that four quarter-point hikes, as priced by markets, would be needed.
Pill, who has voted for hikes at the last four meetings, said an early move would have shown the BoE wasn't "holding and hoping."
Governor Andrew Bailey, in a CNN interview aired Tuesday, said pass-through from the energy shock had been "more subdued" in Britain, "but the longer this goes on, the harder it gets."
Prime Minister Benjamin Netanyahu told Army Radio any U.S. or Israeli attack on Iran was "not convenient" right now, a day after Israel's Channel 12 reported he had urged Trump to resume strikes before the Oct. 27 Israeli election.
UKMTO said two commercial vessels were hit by "unknown projectiles" in the Strait of Hormuz on Tuesday, with minor damage and no injuries.
The Guards separately said, via Mehr, that a container ship struck a naval mine and sank on Wednesday, an account that differs from UKMTO's. Iran's Vice President Mohammad Jafar Ghaempanah said "war will ultimately lead to diplomacy."
Britain must tell the public that departmental cuts will be needed to pay for higher defence spending, the International Monetary Fund said at its annual meetings in Bangkok.
The government faces an annual bill of 11 billion pounds ($14.6 billion) to lift military spending to 3% of GDP by 2030 and has yet to say how it will pay, with plans due at next year's spending review.
Brent futures rose 0.11%, to $105.81 a barrel, and U.S. West Texas Intermediate gained 1.60%, to $95.65, as Saudi supply risks stayed in focus after the Houthis said they targeted Aramco sites in Dhahran and Riyadh.
Gold futures extended losses, falling 1.37% to $4,120.05 an ounce, while spot gold dropped 1.53% to $4,096.95.
UK round up
Softcatreported a 24.7% rise in annual gross profit to £616.3 million, beating expectations, and forecast high-single-digit underlying operating profit growth for fiscal 2027, excluding its planned U.S. acquisition of GDT.
Ashmore's assets under management rose 1% to an estimated $54.5 billion in the September quarter, as $1.1 billion in net inflows offset $600 million in negative investment performance amid a late-quarter bond market selloff.
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