LONDON: London stocks ended the week on a positive note, as investors shrugged off slightly higher than expected US producer prices, maintaining hopes for a September rate cut by the Federal Reserve.

The blue-chip FTSE 100 index was up 0.4%, after hitting a one-week high earlier in the session.

The domestically-focused mid-cap FTSE 250 closed 0.1% higher at 21,202.89 after touching a more than two-year high on Thursday.

Both indexes notched a second consecutive week of gains and extended their winning streak to a third straight day.

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.

The producer price numbers in the US did little to change bets around a rate cut by the Fed by September - traders are still pricing in a 95% chance.

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

Major US banks such as J.P Morgan, Wells Fargo and Citigroup kicked off the earnings season with a mixed batch of results.

The banking sector in the UK gained 0.1%.

Precious metal miners fell 1.7% in tandem with gold prices.

Utility stocks took a breather and fell the most on the FTSE 100, after gaining between 2.6%-10% in the previous session.

The utilities sector also lost 1.3% 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.

“It will be a pretty packed week ahead with both the key labour market and inflation reports out. We will also get the latest retail sales report for June alongside the latest public finances report,” Sanjay Raja, Chief UK Economist at Deutsche Bank said in a note.