FTSE 100 rises despite hot US inflation as Bank of England chief pours cold water on four-hike fears

Bank of England chief economist Huw Pill signalled that market expectations of four consecutive rate hikes totalling 100 basis points are unlikely to materialise, calming London investors even as US inflation accelerated sharply to 3.7% in September. A weaker pound — knocked lower by the stronger dollar — flattered FTSE 100 multinationals including AstraZeneca, GSK, Unilever and Burberry, whose overseas revenues translate into more pounds when sterling falls. The index closed up 74.53 points, or 0.7%, at 10,724.86, while Wall Street sold off sharply, with the Nasdaq down more than 1.6%.

The US CPI jump was fuelled largely by energy costs surging 20% annually — with gasoline up 34% — driven by Iran's blockade of the Strait of Hormuz since the US-Israel attack in late February.

Expectations of a Fed rate hike at its next meeting doubled in a week to 40%, with markets now more than 90% certain a hike will come by December if not sooner.

Pill warned the UK faces 'a difficult few months' but said concrete evidence of second-round wage and price effects would be needed before four hikes could be justified.