London Close: FTSE 100 Retreats from Record High After BoE Holds Rates
UK stocks ended Thursday lower as investors booked profits following a recent rally. The Bank of England's decision on interest rates and ongoing economic growth concerns influenced the market.
Weak performance in Frankfurt and Paris, combined with a slow start on Wall Street, dampened market sentiment in the afternoon session. The FTSE 100 closed down 0.4% at 9,735.78, retreating from Wednesday's record high of 9,777.08.
Market Movers
- Strong gains were seen in banks, miners, and retailers.
- Significant declines affected blue-chip companies such as Hikma, Smith & Nephew, Diageo, and Convatec.
Bank of England Interest Rate Decision
The Monetary Policy Committee meeting was the session’s focal point. The BoE voted 5-4 to maintain the borrowing cost at 4%, ending its usual pattern of cutting rates every other meeting.
Despite slow economic growth, the Bank continues to face challenges from persistently high inflation. The current consumer price index stands at 3.8%, lower than recent peaks but above the long-term target of 2%.
"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 at EY ITEM Club.
Summary
The FTSE 100's pullback reflects cautious investor behavior amid mixed economic signals and the BoE's unexpected decision to hold interest rates steady.
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