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FTSE 100 up 0.9%, FTSE 250 up 1%

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Barclays ( BCS ) tops FTSE 100 on share buyback

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Inflation rate below BoE expectations

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ITV falls after largest shareholder reduces stake

Oct 22 (Reuters) - London stocks rose for a third

consecutive day on Wednesday as investors ramped up bets on

interest rate cuts from the Bank of England after data showed

inflation unexpectedly held steady, while lender Barclays ( BCS ) jumped

after a surprise share buyback plan.

Barclays ( BCS ) advanced 4.2% to become the best boost on

the FTSE 100 index after announcing a 500 million pound ($670

million) share buyback and upgraded a key profitability target

for the year. This boosted the banks index by

1.6%.

Inflation for the month of September was held at 3.8%,

coming below the Bank of England's estimates of 4%, raising bets

on a rate cut this year. Traders see a roughly 75% chance that

the BoE's Monetary Policy Committee will cut bank rate to 3.75%

from 4% at its December meeting, up from about 46% before the

data.

The data brings in much-needed relief ahead of the November

budget by finance minister Rachel Reeves, who along with BoE

policymakers have been trying to navigate through sticky

inflation and slow economic growth.

The blue-chip FTSE 100 gained 0.9% to 9,547 points

by 1116 GMT, while the mid-cap focused FTSE 250 advanced

1%.

Oil majors BP and Shell gained 1.4% and

1.2%, respectively, as oil prices edged higher.

Among individual stocks, Rio Tinto advanced 2.1%

after sources say the miner explored a potential

asset-for-equity swap with Chinalco that would trim the Chinese

investor's 11% stake, which would help the company to resume

buybacks and pursue new strategic deals.

On the flip side, ITV shares slid 8.2% after the

broadcaster said its largest shareholder Liberty Global ( LBTYA )

reduced its stake to 5% from 10% in the company. The

stock was the worst performer in the FTSE 250.

($1 = 0.7451 pounds)