UK39;s August inflation unexpectedly falls
Odds for BoE to hold rates stand at 45
Homebuilders boost London stocks
MG gains on betterthanexpected operating profit
FTSE 100 climbs 0.6, FTSE 250 jumps 1.2

Sept 20 Reuters UK stocks rose on Wednesday after data showing a surprise fall in inflation in August boosted sentiment and raised hopes that the Bank of England BoE was nearing the end of its interest rate hiking cycle.

The exporterheavy FTSE 100 rose 0.6, by 0820 GMT, while the sterling weakened 0.3 against the U.S. dollar, hitting its lowest levels since May.

Britain39;s annual consumer price inflation CPI unexpectedly fell to 6.7 last month from 6.8 in July, data showed, prompting investors to bolster bets that the BoE would pause its historic run of rate hikes as soon as Thursday.

Economists had forecast CPI would rise to 7.0.

CPI data makes tomorrow39;s BoE decision a little bit more balanced and the market is no longer fully priced for a rate hike, said Michael Metcalfe, head of macro strategy at State Street Global Markets.

If they BoE do hike, the message probably will be that they are going to be on hold for quite some time and that will mitigate any damage that the hike will do to markets tomorrow.

Money markets are betting on a 45 chance for the BoE to hold interest rates steady at 5.25 on Thursday.

The U.S. Federal Reserve is widely expected to keep rates unchanged at its monetary policy decision later in the day.

Ratesensitive homebuilder…