HSBC reverts to paying dividends
Quilter soars on report of NatWest considering bid
Inflation expectations ease again in July
FTSE 100 up 0.5, FTSE 250 adds 0.2

Aug 1 Reuters UK39;s top share index extended its winning run on Monday as HSBC surged after providing an upbeat outlook, while easing inflation expectations raised doubts over the chances of a supersized rate hike from the Bank of England BoE this week.

The bluechip FTSE 100 climbed 0.5, hitting fresh sevenweek highs as earnings optimism boosted European markets.

HSBC jumped 5.9 after Europe39;s biggest bank announced a higher profitability target and bullish dividend outlook. It also pushed back on a proposal by top shareholder Ping An Insurance Group Co of China to split itself.

The wider banking index added 3.8.

Pearson rose 6.8 as the education group reiterated its fullyear profit outlook and said its new integrated structure under boss Andy Bird was helping to save costs and grow the top line.

Investors were awaiting the BoE39;s policy decision on Thursday. The British public39;s expectations for inflation fell again in July, a survey showed on Monday, potentially adding to the case for only a quarter percentage point increase in interest rates. 

Hawkish comments from BoE ratesetters recently have raised the prospect for the first half percentagepoint rate hike since 1995. 

In our forecast, we expect a 25 bp hike next week to be the last in this hiking cycle, but the risks are now clearly skewed…