Sharecast - The FTSE 100 was called to open 45 points higher at 7,420.
CMC Markets analyst Michael Hewson said: "With all the bad news that has dominated the airwaves in recent months it was very welcome to see that US CPI rose significantly less than expected in October to its lowest level since January, prompting a huge relief rally in stocks, bonds as well as a sharp selloff in the US dollar.
"The rally was given added legs by at least three Fed speakers, Dallas Fed President Lorie Logan, Philadelphia Fed President Patrick Harker, and San Francisco Fed President Mary Daly, who indicated that a slower pace of rate hikes might be appropriate."
Also helping sentiment were reports that China has decided to scrap Covid flight restrictions and cut the quarantine requirements for inbound travellers to eight days.
On home shores, figures out earlier from the Office for National Statistics showed that the UK economy contracted 0.2% between July in September, down from 0.2% growth in the previous quarter but ahead of expectations for a 0.5% contraction.
The fall in GDP was driven by a drop in manufacturing.
Darren Morgan, director of economic statistics at the ONS, said: "With September showing a notable fall partly due to the effects of the additional bank holiday for the Queen’s funeral, overall the economy shrank slightly in the third quarter.
"The quarterly fall was driven by manufacturing, which saw widespread declines across most industries.
"Services were flat overall, but consumer-facing industries fared badly, with a notable fall in retail."
In corporate news, insurer Beazley reported a 22% rise in gross premiums for the first nine months of the year and said initial estimated losses from Hurricane Ian would be $120m.
It added that guidance for a combined ratio of high 80s remained in place.
Safety equipment company Halma (LON:HLMA) named Steve Gunning as chief financial officer designate, succeeding current CFO Marc Ronchetti.
Gunning will join Halma on 16 January, while Ronchetti will take over from Andrew Williams as chief executive in April.
