London’s FTSE 100 stock index hit a one-week high on Friday amid broader gains, as investors cheered growing bets of a September interest rate cut by the Federal Reserve after a surprise fall in US inflation data.

The blue-chip FTSE 100 index was up 0.4%, while the domestically-focused mid-cap FTSE 250 inched down 0.1% as of 0717 GMT, after closing at a more than two-year high on Thursday.

Both indexes are on track to log their second weekly gains.

Investor sentiment was buoyed globally by increased bets of an interest rate cut by the Fed in September, after data showed a surprise drop in US consumer prices for June on Thursday.

London’s pharmaceutical and biotech stocks rose 1.4%, while medical equipment and services shares gained 0.7%.

The sectors were set to extend their rallies to a third and eighth session, respectively. Heavy-weight banks gained 0.7%.

Energy shares advanced 0.4% on higher oil prices but were poised to lag their peers this week.

Precious metal miners sunk to the bottom with a 0.6% decline in tandem with gold prices.

The market’s focus is now on the producer prices data in the US that could further strengthen the case for rate cuts in September.

As another earnings season commences in major economies, investors will keep an eye on quarterlty results to gauge the state of corporates.

British stocks finish higher on precious miners boost

UK’s consumer prices figures are due next week, which will be in the spotlight, against the backdrop of a new government and as the Bank of England’s August meeting inches closer.

Ashmore dipped 3.9%, after the fund manager reported a further $2 billion of quarterly net outflows of client cash, as investors continued to shun its emerging markets funds.