London Stocks Climb as Investors Anticipate BoE Rate Cut

FTSE Futures Updates

London stocks continued to rise on Thursday, as investors looked forward to a potential interest rate cut from the Bank of England later in the day, driven by a significant deceleration in inflation and indications of a weakening economic landscape. The UK’s blue-chip FTSE 100 was up 0.3% at 1013, following a higher close in the previous session. The domestically-focused midcap index increased by 0.36%. Meanwhile, the pan-European benchmark index was largely unchanged ahead of the European Central Bank’s policy announcement on Thursday, which is widely expected to result in a decision to hold rates.

The Bank of England is anticipated to lower rates by 25 basis points to 3.75%, representing its fourth decrease in 2025 and the lowest point in almost three years, yet remaining nearly twice the rate set by the ECB. Inflation, recorded at 3.2% in November, continues to be the highest among G7 economies, a situation exacerbated by last year’s tax increases, which constrains the potential for substantial easing measures. Market participants are factoring in merely one additional reduction in 2026, anticipated by April, even as there has been a modest increase in expectations following the recent decline in inflation. The FTSE 350 index of retailers shows an increase, rising by 0.9%.

  • Currys experienced a notable increase of 10.3% following the announcement of a
    more than twofold rise in first-half profit.
  • Frasers Group was up 2.2% and Moonpig Group was up 1%, respectively.
  • Aerospace and defence stocks were also among the top gainers, up 0.8%.
  • Limiting overall gains, precious metal and mining stocks lost 0.4%, dragged by lower gold prices.
  • Healthcare stocks also fell 0.4%.

The overall movements have positioned the FTSE 100 for its most successful year since 2009, with a year-to-date increase of approximately 20%, surpassing the performance of market’s benchmark S&P 500 index, which has experienced a rise of 14.3% this year. Among individual stocks, Premier Inn owner Whitbread climbed 6% after Corvex disclosed a stake and urged a strategic review, placing it at the top of the benchmark index.