Beaten down UK midcap stocks are on track for the sharpest two-day advance since November 2020’s Covid-19 vaccine breakthrough.

The FTSE 250 benchmark has risen 5.5% since Monday’s close as clear signs of cooling inflation embolden bets on riskier assets. The midcap gauge gained on the slowest monthly UK consumer price growth in two years, building on Tuesday’s rally on softer-than—expected US inflation.

Bets that central banks have vanquished inflation and that rates in major economies have peaked is proving a boon for companies whose fortunes are largely tied to the cost of debt — such as banks and retailers. Homebuilders also rallied following a slump in a key five-year swap rate that is used to price mortgages.

The FTSE 250’s gain extended Tuesday’s 3.5% climb as UK stocks were swept up in a global risk rally.

“For domestic small and mid caps, the confirmation of lower inflation and the prospect of lower interest rates next year is supportive to sentiment,” Janet Mui, head of market analysis at RBC Brewin Dolphin, said in written comments.

UK shares are finally seeing reprieve after years of underperformance spurred by a cost-of-living crisis and the overhang of Britain’s exit from the European Union. Over the past three years, the FTSE 250 index has declined 2.3% while the Stoxx Europe 600 has risen 18%.

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“I do think in the near term the market can stay bullish due to more evidence of sustained slowdown in inflation and more reasons to believe in rate cuts next year,” Mui said.