The FTSE 100 inched higher on Tuesday, buoyed by financial stocks following the Bank of England’s decision to ease capital requirements for lenders to stimulate growth, while industrial shares experienced a rebound after a significant decline in the prior session. The blue-chip FTSE 100 rose 0.4% by 1119, while the midcap FTSE 250 was flat, reversing course after experiencing the largest single-day percentage drop in two weeks on Monday. Shares of Lloyds Banking Group gained 1.6%, the most among banks, while HSBC Holdings, Barclays, and Standard Chartered added between 0.9% and 1.3%. The broader banks index climbed 1.2% as Britain’s central bank cut the amount of capital it estimates lenders need to hold for the first time since the global financial crisis after the lenders passed its stress test.

Chemicals stocks were also in a bright spot, up 1%, with Victrex jumping 7%, after the thermoplastic polymer maker announced higher full-year sales. The OECD indicated on Tuesday that Britain’s economy is projected to expand at a rate exceeding earlier forecasts for the coming year, attributing this to the effects of Finance Minister Rachel Reeves’ budget on consumer spending, alongside the influence of global uncertainties that may continue to exert upward pressure on inflation.

Last week, Reeves’ long-awaited budget alleviated certain apprehensions regarding Britain’s long-term financial outlook, contributing to a rally in UK shares, bonds, and the pound. Participants in the international financial markets are closely monitoring the forthcoming decision from the United States. The Federal Reserve is set to address interest rates next week, with market participants anticipating a reduction of 25 basis points.

The Bank of England is anticipated to implement a comparable adjustment later this month. Conversely, precious metal miners experienced a decline of 1.6% following a drop in gold prices, while industrial metal miners saw a slight decrease of 0.2% as copper retreated from its record high.