London stocks moved slightly higher on Friday, and were set for a third straight month of gains, as investors await inflation readings from Europe and the US that will likely dictate the path of interest rates globally.

The blue-chip FTSE 100 index was up 0.3% at 8,255.49 points.

The index is set for a third week of declines, the longest such run in nearly three months. Still, it is 1.4% higher for the month of May, poised for a third consecutive month of gains.

The mid-cap FTSE 250 was flat, set to log its first weekly loss in five. Investors were on edge as they braced for the pivotal euro zone and US inflation data later in the day. “There’s room for a relief rally here,” said Ben Laidler, global markets strategist at eToro.

British equities drop as interest rate outlook weighs

“The markets have been under pressure and data from the US and Europe may trigger this relief rally. The ingredients are in place for the UK rally.”

The euro zone inflation report for May – due 0900 GMT – is anticipated to reveal a modest increase.

Analysts predict that the Bank of England will closely align with the European Central Bank’s actions to initiate the rate-cutting cycle.

A rate cut by the ECB is almost assured next week.

US personal consumption expenditures (PCE) data, the Federal Reserve’s favoured inflation metric, is also due later in the day.

Among individual stocks, Centrica jumped 3.4% the most on the FTSE 100, after RBC upgraded the stock to “outperform” from “sector perform”.

JD Sports Fashion was the top loser on the benchmark index, sliding 9.7% after the sportswear retailer kept its profit outlook unchanged.

It also dragged the FTSE 350 retail index to the bottom among sectors.