London close: FTSE 100 retreats from record high as BoE holds rates steady

London Close: FTSE 100 Retreats from Record High as BoE Holds Rates Steady

UK stocks ended lower on Thursday as investors cashed in profits after a recent rally, influenced by the Bank of England's interest rate decision and economic growth worries. Losses in Frankfurt and Paris, alongside a weak start on Wall Street, further weighed on market sentiment by afternoon trading.

The FTSE 100 closed down 0.4% at 9,735.78, retreating from Wednesday's record close of 9,777.08. Gains from banks, miners, and retailers were offset by significant declines among blue-chip stocks such as Hikma, Smith & Nephew, Diageo, and Convatec.

Monetary Policy Committee Decision

The Monetary Policy Committee's meeting was the session's central event. The Bank of England voted five to four to keep the borrowing cost at 4%, breaking its usual pattern of rate cuts every other meeting. Economic growth remains weak, while inflation stays stubbornly high.

The consumer price index currently stands at 3.8%, down from recent peaks but still above the Bank's 2% long-term target.

"Today’s decision clearly opens the door to a December cut, but that remains contingent on the incoming data," said Matt Swannell, chief economic advisor to the EY ITEM Club.

Swannell added, "If there are further signs of falling inflationary pressures in the coming months and if most tax rises expected at the Autumn Budget are introduced almost immediately, there could be a narrow majority on the Committee favoring a Christmas cut."

Market Impact and Outlook

Author's summary: The FTSE 100 eased from its record high as the Bank of England held rates at 4%, with inflation persistence and upcoming budget data shaping expectations for a possible December rate cut.

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Sharecast Sharecast — 2025-11-06

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