Britain's top shares were up 0.5 percent at midday on Tuesday, just below a fresh 21-month peak, with strength in commodity stocks and banks providing the main strength and inflation numbers largely ignored.
By 1159 GMT, the FTSE 100 index was 26.08 points higher at 5,670.621, slipping back after hitting an intra-day high of 5,695.94, a level not seen since June 2008.
Miners bounced back after recent falls as metal prices steadied, helped by an easier dollar. Eurasian Natural Resources , Lonmin, Rio Tinto and Vedanta Resources gained 1.9 to 2.3 percent.
Energy issues also rallied after recent weakness although crude prices remained weaker. BP, BG Group, and Royal Dutch Shell firmed 0.3 to 1.0 percent.
Cairn Energy was the top FTSE 100 gainer, up 10.4 percent after the oil explorer accompanied full-year results with upbeat comments on its operations in India and Greenland, prompting BofA Merrill Lynch to hike its net asset value.
British annual consumer price inflation slowed last month for the first time since September, dropping more than expected after favourable base effects and a fall in the prices of games and toys, data showed.
"Although the inflationary spike was widely accepted as a consequence of coming out of the recession, the bigger concern will be if price growth slows too quickly, as this could increase the risk of the economy taking a second hit," said Anthony Grech, market strategist at IG Index.
Banks, however, shook off any double-dip concerns and Monday's revived worries over the debt situations in Greece and Dubai, with Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group up 0.5 to 1.8 percent.
Elsewhere with financials, insurer Legal and General was a strong gainer, up 4.3 percent after it posted profits ahead of analysts' expectations, helped by cost cuts, and said it saw new opportunities this year in spite of subdued economic growth.
DIY DENTED
Home improvement retailers were the biggest losers, with traders saying that a warning from mid-cap Carpetright that year to 2010 profit will fall below current market expectations weighed on sentiment for the sector.
Home Retail and Kingfisher fell 1.5 and 1.1 percent, respectively. Kingfisher reports full-year results on Thursday.
Carpetright was the biggest FTSE 250 faller, down more than 14 percent.
Meanwhile, British retail sales growth slowed more than expected in March, though retailers expect a small recovery in April, the Confederation of British Industry's monthly distributive trades survey showed on Tuesday.
Elsewhere, pharma issues were a drag on the blue chips, weighed down by a 0.7 percent fall from GlaxoSmithKline.
The drugmaker and regulators said on Monday that doctors should temporarily stop using its Rotarix product against a diarrhoea-causing virus called rotavirus because it is contaminated with an apparently harmless pig virus.
Imperial Tobacco, the world's fourth-biggest cigarette maker, shed 0.5 percent after it said its half-year cigarette volumes will be down around four percent as it reported trading in line with its expectations..
Peer British American Tobacco fell 0.4 percent.
And BAE Systems lost 1.8 percent after broker Bernstein downgraded the defence stock to "market perform" from "outperform", citing valuation grounds.
U.S. stock futures pointed to a higher open on Wall Street with investors looking to February existing home sales, due at 1400 GMT, to give another indication as to the health of the world's biggest economy.
