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London stocks gain ahead of Bank of England rate decisions

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British equities climbed on Monday as Croda International led a rebound in the chemicals sector and Ocado jumped following a brokerage upgrade, while investors eyed major central bank decisions on monetary policy later in the week.

The benchmark FTSE 100 edged 0.1 percent higher, while the more domestically focused FTSE 250 midcap index added 0.5 percent.

Croda Internationalrose 3.2 percent, steering gains in chemical stocks and rebounding from Friday’s tumble after a profit warning from the specialty chemicals group.

Ocado rose 3.6 percent after BNP Paribas Exane upgraded the online grocer’s rating to “neutral”.

A softer pound also helped the exporter-heavy FTSE 100.

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On the downside, energy majors Shell and BPdipped 0.7 percent and 1.3 percent, respectively, as oil prices slipped.

Investors will first assess fresh inflation data out of the United States on Tuesday for clues on the Federal Reserve’s monetary policy decision a day later.

“A hike would take markets by surprise,” said Steve Sosnick, chief strategist at Interactive Brokers.

“Even if they don’t hike, it will be a reflection of the pace of monetary policy going forward.”

The European Central Bank is also set to announce its policy decision on Thursday, followed by the Bank of England next week.

UK equity markets have been range-bound of late as still-high inflation has knocked up expectations of more monetary tightening.

The labor market and economic growth data this week will be crucial in understanding the state of the economy and the BoE’s policy-tightening path.

Among individual stocks, AO World jumped 7.8 percent after sportswear and fashion retailer Frasers Group acquired an 18.9 percent stake in the online electrical retailer.

Kainos Group jumped 6 percent after brokerage Stifel upgraded the tech stock to “buy” from “hold”.

London-listed shares of Carnival Corp. soared 12.7 percent after JP Morgan upgraded the cruise operator’s rating to “overweight”.

Meanwhile, the Confederation of British Industry expects the economy to sidestep recession entirely this year. However, deep-rooted problems like weak business investment will persist, the trade body said.

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