London Market Close: FTSE 100 Slips as Bank of England Holds Rates
The FTSE 100 declined on Thursday after the Bank of England decided to keep interest rates steady in a closely contested vote. Investors also digested a wave of corporate earnings from top blue-chip companies.
Market Performance
- FTSE 100 closed down by 41.30 points, or 0.4%, at 9,735.78.
- FTSE 250 dropped 189.35 points, or 0.9%, to 21,905.03.
- AIM All-Share declined by 3.09 points, or 0.4%, to 753.13.
- Cboe UK 100 was down 0.6% at 969.72.
- Cboe UK 250 lost 1.2% at 18,935.03.
- Cboe Small Companies slipped 0.5% to 17,896.75.
Bank of England's Tight Vote
The Bank of England left rates unchanged following a narrow vote. Governor Andrew Bailey’s decision determined the outcome.
- Five of nine members of the Monetary Policy Committee, including Governor Bailey, voted to maintain rates.
- Supporters of this stance included Clare Lombardelli, Catherine Mann, Megan Greene, and Huw Pill.
- Four members—Sarah Breeden, Swati Dhingra, Dave Ramsden, and Alan Taylor—supported a quarter-point cut.
“Policy was already significantly over-restrictive, which could unduly damage activity and possibly lead to an undershoot in inflation in the medium term,”
argued Swati Dhingra and Alan Taylor, backing a rate cut to ease monetary conditions.
Other committee members stressed the ongoing risk of persistent inflation, suggesting that maintaining tighter policy longer might still be necessary. Governor Bailey said that inflation risks had become more balanced in recent months but believed further data would help guide future decisions.
Author’s Summary
The FTSE 100 slipped as the Bank of England narrowly kept rates unchanged, with a divided committee highlighting uncertainty over inflation and economic momentum.