FTSE 100 Rises as Investors Await Bank of England Decision

FTSE Futures

The U.S. Federal Reserve’s widely anticipated interest rate hike on Thursday caused the UK’s FTSE 100 to rise as market focus shifted to the Bank of England’s rate decision, which is scheduled for later in the day.

The blue-chip FTSE 100 index rose 0.51% to 10,742.81 points by 1034, while the midcap FTSE 250 climbed 0.42%.

  • Clothing retailer Next has gained 0.82% after raising its annual outlook for the fourth time this year, increasing its annual pre-tax profit guidance by £12 million to £1.255 billion.
  • The Bank of England is anticipated to maintain interest rates at their current level later today; however, attention will be focused on any indications regarding the potential impact of elevated energy prices on a possible rate increase in November.
  • Traders continue to anticipate an increase in interest rates of no less than 43.5 basis points by the end of the year, based on data compiled by LSEG.
  • “The BoE cannot hike rates into what’s chiefly a supply shock – this is not 2022 and it’s not the US, where ​the economy is much stronger and benefitting from the AI boom,” Saxo Neil Wilson said in a note.
  • The Fed raised interest rates by 25 basis points on Wednesday and indicated one more hike in the coming months, as newly appointed Chief Kevin Warsh joined a unanimous vote in favour of the move.
  • The decision comes in the wake of a significant increase in oil prices over the past few months, a rise fuelled by the ongoing conflict in the Middle East, which has exacerbated inflationary pressures and led policymakers around the globe to reevaluate their monetary strategies.
  • AstraZeneca rose around 1% after unveiling an investment of nearly 200 million yuan ($29.81 million) to upgrade its production and supply base in Wuxi, China, the company’s Chinese unit said in a statement.
  • Precious metals rose 1.4% after gold prices increased following the Fed hike, with Pan African Resources and Endeavour Mining up by 4.5% and 1% respectively. Among mid-caps, budget carrier Wizz Air climbed 2.4% after the airline set out medium-term financial targets, including annual revenue of €10 billion ($11.47 billion).
  • It also increased its forecast for revenue per available seat kilometre for the second quarter.
  • Construction firm Galliford Try opens new tab advanced 3.8% after a 24% jump in annual profits, helped by higher project activity and disciplined cost control.