Strong gains among consumer stocks pushed London’s blue-chip index to a 15-year closing high, despite jitters over the outcome of Greece’s debt talks.
Yanis Varoufakis, the Greek finance minister, said he remained hopeful of a bailout deal, even though there were few signs of progress in the discussions with his EU colleagues.
Even a decline in the price of oil failed to dent the mood in London, where the FTSE 100 Index ended the day up 41.08 points at 6,898.13 – a whisker away from the closing record of 6,930.2 hit at the end of 1999.
Tony Cross, market analyst, at Trustnet Direct, said: “That bigger-than-expected drop in UK inflation is paving the way for the Bank of England to deliver another cut in interest rates so the prospect of this, combined with cheaper energy and food, is giving a number of consumer-centric stocks something of a lift.
“We’ve finished on an upbeat note before, but it’s difficult not to be thinking that the FTSE 100 has the potential to test that all-time high in the coming days.”
Spirits giant Diageo topped the list of top-flight risers, gaining 46p, or 2.5 per cent, to 1,885.5p, while Imperial Tobacco rose 66p to 3,063p.
After the market closed, beleaguered supermarket Tesco announced the appointment of Barratt chairman John Allan as its next chair, following Richard Broadbent’s decision to step down. The retailer’s shares had finished up 1.95p at 244.35p.
Royal Mail was one of the biggest blue-chip fallers, closing down 10.4p, or 2.3 per cent, at 437.6p after restructuring costs caused rival TNT Express to report a loss for the final three month of last year.
InterContinental Hotels, which owns the Crowne Plaza and Holiday Inn brands, dipped 43p to 2,545p on the back of a 3 per cent fall in operating profits for the year to 31 December.