London's FTSE 100 edged higher on Tuesday as heavyweight financial and defence stocks offset weakness in energy shares, while investors assessed hawkish comments from Bank of England Deputy Governor Clare Lombardelli.

The blue-chip FTSE 100 index rose 0.2% to 10,811.28 points by 1033 GMT, and was up 0.5% at 10,833.69 by midday. The midcap FTSE 250 rose 0.6% in morning trading and was up 0.7% at 24,880.61 at midday.

Defence leads as Rolls-Royce climbs

Aerospace and defence led the sector gains, rising 2.4%. Rolls-Royce climbed 3.3% to rank among the top performers on the FTSE 100, while Melrose Industries and Babcock International Group each advanced more than 1%.

Financials provided the biggest boost to the index. Lion Finance Group rose 3.6% to top the blue-chip index, while Prudential gained 3% and Barclays rose 2.2%.

Energy shares fall as oil slides

On the other side of the market, the energy sector led declines, falling 2.2% after Brent crude slipped below $90 a barrel. Brent stood at $91.15 a barrel by midday on Tuesday, down from $94.27 late on Monday, as US President Donald Trump downplayed the prospect of further military action against Iran, easing concerns about Middle East oil supplies.

Marks & Spencer rose 1.9% after the retailer forecast profit growth ahead of sales over the medium term. Vodafone fell 1.1% even after the telecoms group raised its full-year profit and cash flow guidance.

Rate hike talk in focus

Investors also parsed comments from Bank of England Deputy Governor Clare Lombardelli, who said in an interview with The Guardian that she would not rule out a rate rise in December. Money markets priced in a roughly 50% chance of a 25-basis-point Bank of England rate hike in December, according to LSEG data.

On the data front, British retail spending rose modestly in October despite higher petrol prices, according to a British Retail Consortium survey, as households pared back spending in some categories ahead of Black Friday deals.

The pound was quoted at $1.3426 at midday on Tuesday, higher than $1.3415 at the London equities close on Monday.

US inflation data next

Attention now turns to the release of US consumer price inflation figures for October at 1330 GMT. Consensus forecasts point to annual inflation accelerating to 3.9% in October from 3.7% in September, a reading that could influence expectations for the future path of US interest rates ahead of the Federal Reserve's meeting on 9 December.

London shares have benefited from the recovery in global confidence after last week's technology-led sell-off, although lower oil prices continue to weigh on energy companies including Shell and BP.