The FTSE 100 experienced a decline exceeding 0.5% following the Bank of England’s decision to lower interest rates by 25 basis points to 4%. Investor sentiment was tempered by signs of division among policymakers regarding further rate cuts. While some companies weighed heavily on the index, others showed resilience, demonstrating a mixed market response to the economic news.
- The FTSE 100 fell more than 0.5% on Thursday.
- The Bank of England cut interest rates by 25 bps to 4%.
- Traders reduced expectations for more rate cuts after a split vote.
- AstraZeneca and Shell weighed most heavily on the index, declining 0.8% and 2.9% respectively.
- BAE Systems declined by 5% and Reckitt by 1.3%.
- Intercontinental Hotels surged more than 6% after reporting solid revenue growth.
- Jefferies called the outlook for Intercontinental Hotels “incrementally positive”.
- UK house prices rose 0.4% in July, the strongest monthly gain this year.
The mixed performance within the FTSE 100 reflects uncertainty in the economic outlook. While lower interest rates and rising house prices may signal potential growth, the divergence in opinion among policymakers, combined with the downturn of some leading companies, suggests a cautious approach is warranted. The strong performance of some companies indicates specific sectors may be more resilient, but the overall market’s sensitivity to monetary policy and economic data remains evident.