Investors had a rare surge of optimism after inflation figures fell more sharply than forecast and the FTSE 100 extended its gains for a third consecutive day, climbing 46.44 points, or 0.6%, to 7,486.91.

Housebuilders and property groups were among the big gainers. Berkeley Group was up 1.2%. Crest Nicholson and British Land were up by 0.7% and 1.1%, respectively.

Banking stocks also moved ahead with NatWest and Lloyds gaining 1.8% and 2.0%.

Mining shares made strong gains as the market tracked a rise in metal prices after better-than-expected economic data from China, the biggest consumer of raw materials.

Glencore, which has set out plans to break itself up after striking a deal to buy the majority of Teck Resources’ coal business, added a further 14.75p to 464.75p after peaking at 474p. Anglo American gained 67p to close at 2211p and Antofagasta put on 32p to end the day at 1377p.

Energy company SSE also made gains, rising 2.25% after its half-year earnings surpassed expectations.

Wealth manager St James’s Place rallied with a 6.9% uplift after defending its decision not to reduce share awards for top executives last year despite a decline in its share price.

Moving in the other direction were Diageo, down 53p to 2,845.5p, Tesco, down 5.1p to 273.5p, Flutter Entertainment, down 190p to 12,585p, Pearson, down 14.4p to 950p, and Centrica, down 2.2p to 147.6p.