UK stocks today: London stocks fall after BoE approves interest rates.
The blue-chip FTSE 100 fell 0.1% but was up as much as 0.6% before the central bank’s decision. British government bond yields rose and the pound pared some of its earlier losses.
Investment banking and brokerage service stocks fell 2.7%, showing the biggest decline, while interest rate-sensitive banking and real estate stocks fell 1.1% and 1.6%, respectively.
The BoE said it would “continue to review how long the bank rate should be kept at its current level”. Officials from the U.S. Federal Reserve and the European Central Bank have made it clearer that interest rate cuts are on the agenda.
“It’s just pushed things to the right. It’s less likely we’ll see rate cuts sooner and the market has pushed expectations forward by a few months, but the direction of travel hasn’t changed, it’s just the timing,” said Ben Russon. , portfolio manager and co-head of UK equities at Martin Currie, part of Franklin Templeton.
The mid-cap FTSE 250 fell 1.2%, deepening losses from before the BoE decision. Both FTSE indices ended January with their worst monthly performance since October 2023 as investors curbed bets on aggressive interest rate cuts this year. U.S. stocks closed sharply lower on Wednesday as the Federal Reserve kept interest rates steady, raising expectations of a March cut.
Shell rose 2.4% to its highest in more than three weeks after the energy major increased its dividend by 4% and extended share buybacks following better-than-expected fourth-quarter adjusted profits.
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