The FTSE is continuing to push out to fresh 21-month highs as traders digest earnings news and inflation data.

Blue chip stocks remain in favour despite some lacklustre corporate news this morning. The FTSE 100's biggest gainer so far is Cairn Energy, up almost 9% on the back of a positive outlook over the company's Indian operations, with traders taking the significant fall in profitability for the year comfortably in their stride. We've also seen bumper earnings from L&G with cost-cutting plans playing out well for the business. All this has combined to leave the FTSE 100 eyeing a test on the 5700 level for the first time since June 2008.

The other big news this morning has been UK inflation data, which showed a sharper-than-expected decline. This could give some cause for concern, not least because this also incorporates the recent jump in VAT as well as the forecasted easing of oil prices as we move into the summer. 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. Sterling is looking slightly softer as a result, but expect more influence to be seen here off the back of tomorrow's budget. There's not much due out of the US this afternoon but Wall Street is looking a little stronger at the moment too with the DOW forecast to open up around 24 points at 10,810 - the bull market is still with us.