The benchmark FTSE 100 was up 9 points or 0.12 percent at 7,462 in late opening deals after rising as much as 0.8 percent the previous day, buoyed by a weaker pound.
November's consumer price index was 3.1% higher year on year, the Office for National Statistics revealed on Tuesday, the highest rate since March 2012 and up from the 3% at which it has been for the previous two months and at which it was expected to remain for at least another month.
Core inflation was in line with economists' expectations.
Elsewhere, the retail prices index annual rate was down to 3.9% from 4% last month.
"The Bank of England had acknowledged there was a risk it would go higher, and also thought inflation would go to 3.2 percent last month".
The IIP, commonly known as factory output, continued to decline and fell to a three-month low of 2.2 per cent on annual basis in October mainly due to subdued performance of mining and manufacturing sectors coupled with a contraction in output of consumer durables.More news: Apple finally giving Caesar he's due to the tune of $15 billion
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Electricity generation rose 3.2 per cent in October as compared to 3 per cent a year ago.
Because that is more than a percentage point above the BoE's 2 percent target, Governor Mark Carney will have to write a letter to finance minister Philip Hammond to explain what the BoE is doing in response. The Bank of England has a tricky tightrope to walk.
Consumer price inflation for the urban areas stood at 4.9 per cent in November 2017 against 3.81 per cent in October and 3.13 per cent in November 2016.
Likewise, core inflation that excludes volatile energy, food, alcoholic beverages and tobacco, remained unchanged at 2.7 percent. Despite the pressure, RBI had refrained from cutting interest rates since the last decrease in August, on account of inflationary trends.
"We are probably close to the peak for inflation now, but it will only fall back gradually next year", said Andrew Sentance, senior economic adviser at PwC.
Sterling spiked back toward the $1.34 mark and United Kingdom 10-year Government bond yields rose a couple of basis points to 1.22 per cent suggesting markets anticipate further interest rate rises.