Taking investors by surprise, the Fed chair confirmed that interest-rate cuts are likely to happen next year.

However, later in the day, the Bank of England and the European Central Bank played the Debbie Downers. The BoE kept its rates unchanged and said interest rates needed to stay high for 'an extended period'. There was no discussion of cutting interest rates, and the BoE remains concerned that inflation in Britain will continue to be stickier than in the United States and the euro zone.

ECB President Lagarde also said interest rate cuts had not been discussed at the meeting. The FTSE 100 still gained 1.2% yesterday.

In other news, British consumer confidence inched higher in December: The GfK Consumer Confidence Index rose to -22 from -24 in November, in line with the consensus.

"Despite the severe cost-of-living crisis still impacting most households, this slow but persistent movement towards positive territory for the personal finance measure looking ahead is an encouraging sign for the year to come," said Joe Staton, client strategy director at GfK.

Among stocks, Trainline jumped 15% after Barclays upgraded its rating to "equal-weight" from "underweight".

Leeds Group's shares surged nearly 24% after agreeing to sell its loss-making subsidiary, Hemmers-Itex Textil Import Export, to Nooteboom Bidco for 657,000 pounds.

Reckitt Benckiser Group's EPS estimates for 2023 and 2024 were cut due to greater than expected FX headwinds and higher interest expenses.

Meanwhile, St. James's Place plans to raise up to 1 billion pounds by 2030 to assist in succession planning for its network of partners.

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