By Sruthi Shankar and Shubham Batra
(Reuters) -Britain's main stock indexes closed at near three-week highs on Tuesday, boosted by largely upbeat earnings reports led by advertising firm WPP (LON:WPP) and signs of easing price pressures.
The exporter-heavy FTSE 100 rose 0.4% and the domestically focussed FTSE 250 added 0.2%.
WPP rose 1.9% after it forecast a 2023 operating profit margin at the top end of its previous guidance.
The British Retail Consortium said prices at shops this month rose at the slowest annual pace since May 2022, adding to signs of easing inflationary pressures ahead of the Bank of England's (BoE) policy decision on Thursday.
The BoE is seen holding interest rates, and it is a close call whether the central bank will start trimming borrowing costs next quarter or in July-September, a Reuters poll found.
"At this point in the monetary policy cycle, it's not about actually easing, instead it's about tweaks to communication and pivoting prior positions, which gets the market excited about potential rate cuts in the future," said Kathleen Brooks, research director at XTB UK.
The indexes were also boosted by a record close for New York's S&P 500 on Monday ahead of this week's slew of megacap U.S. earnings, economic data and the Federal Reserve's monetary policy meeting. [.N]
The International Monetary Fund cut its growth forecast for Britain for 2025 on Tuesday by 0.4 percentage points to 1.6%. The GDP growth is seen at 0.5% in 2023 and 0.6% in 2024.
Among individual stocks, Diageo (LON:DGE) rose 0.7% but slipped earlier in the session after the world's top spirits maker missed first-half sales estimates, as a sharp decline in Latin America weighed on its overall performance.
Deliveroo fell 3.1% after Delivery Hero sold its 4.5% stake in the British meal delivery group.