UPDATE 2-FTSE 100 gains ahead of Bank of England meeting; Fed in focus


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      UK inflation still in double-digit territory

      Fed decision due shortly, BoE on Thursday

      FTSE 100 up 0.4%, FTSE 250 off 0.1%

 (Updates prices to market close; adds comment, details)
    By Shashwat Chauhan and Shristi  Achar A
       March 22 (Reuters) - London's FTSE 100 rose on Wednesday
after a wobbly start following data showing a surprise jump in
domestic inflation, while markets waited for the U.S. Federal
Reserve to announce its latest interest rate decision.  
    The blue-chip FTSE 100 index  .FTSE  reversed an earlier
fall to close 0.4% higher, with consumer staples like Unilever
 ULVR.L  and Reckitt Benckiser  RKT.L  leading gains.
    Britain's consumer price index (CPI) inflation unexpectedly
rose to 10.4% in February, lifting sterling  GBP=D3  on
expectations of higher interest rates although the pound later
pared gains, helping lift the internationally focused FTSE 100. 
    The Fed could set the tone for other central banks as it
decides whether to press ahead with its policy tightening amid
concerns over the banking sector.
    "The consensus may be coalescing around a 25 basis point
hike, but then we still worry about financial market stability
and banking prices," said Marija Veitmane, senior multi-asset
strategist at State Street Global Markets.
    "So there are expectations that the Fed will be mindful of
that and will give markets some soothing words about not going
too aggressive and that is supporting market a little bit."
    The more domestically focused FTSE 250 midcap index  .FTMC 
eased 0.1%.  
    Recent turmoil in the banking sector after the collapse of
two U.S. regional lenders and troubles at Credit Suisse have led
traders to alter their expectations for rate hikes. 
    Although the market had begun to question whether the Bank
of England would hike rates again on Thursday, the inflation
data cemented expectations of 25 bps hike. 
    Terminal rate expectations also shifted after the CPI data,
with traders now looking at rates peaking in September at 4.6%
versus a peak of 4.3% in August.  0#BOEWATCH 
    Real estate stocks fell  .FTUB3510  2.3%, with British Land
Company  BLND.L  sliding 6.0% after Goldman Sachs downgraded the
stock on rising vacancies. 
    Retailer Marks and Spencer Group  MKS.L  rose 4.5% after
Exane BNP Paribas raised its rating to "neutral" from
    Fevertree Drinks  FEVR.L  jumped 9.5% as the tonic maker
said it will increase prices and ramp up U.S. production. 

 (Reporting by Shashwat Chauhan and Shristi Achar A in
Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu, Kirsten
For related prices, Reuters users may click on - * 
 UK stock report      .L     
 FTSE index:          0#.FTS6  
 techMARK 100 index:  .FTT1X          FTSE futures:      0#FFI:  
 Gilt futures:        0#FLG:          Smallcap index:     .FTSC  
 FTSE 250 index:      .FTMC           FTSE 350 index:     .FTLC  
 Market digest:       .AD.L           Top 10 by vol:      .AV.L  
 Top price gainers:   .NG.L           Top % gainers:      .PG.L  
 Top price losers:    .NL.L           Top % losers:       .PL.L  
 * For related news, click on - *
 UK hot stocks:       HOT  and  GB      Wall Street:           .N 
 Gilts report:        GB/             Euro bond report  GVD/EUR 
 Pan European stock report:  .EU 
 Tokyo stocks:        .T              HK stocks:            .HK 
 Sterling report:     GBP/            Dollar report:       USD/ 
 * For company prices, click on - *
 Company directory:   UKEQ           By sector:           FTAX  
 * For pan-European market data, click on - *
 European Equities speed guide................  EUR/EQUITY  
 FTSE Eurotop 300 index...........................  .FTEU3  
 DJ STOXX index...................................  .STOXX  
 Top 10 STOXX sectors........................  .PGL.STOXXS  
 Top 10 EUROSTOXX sectors...................  .PGL.STOXXES  
 Top 10 Eurotop 300 sectors..................  .PGL.FTEU3S  
 Top 25 European pct gainers....................  .PG.PEUR  
 Top 25 European pct losers.....................  .PL.PEUR ))

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