The FTSE 100 experienced a significant rally, exceeding 1% and reaching new highs near 9,900. This surge was fueled by rising UK unemployment figures, which increased expectations for a Bank of England interest rate cut as early as next month. Market sentiment is now pricing in a high probability of a rate cut in December.
- The FTSE 100 jumped over 1% to fresh highs near 9,900.
- UK unemployment rose to 5%, the highest since 2021, boosting expectations of a Bank of England rate cut next month.
- Markets now price in an 80% chance of a December rate cut.
- AstraZeneca, British American Tobacco, Shell, BP, and HSBC all contributed to the rally with gains.
- Vodafone surged around 5% after reporting a return to profit in Germany and guiding earnings toward the top of its range.
- Citi called Vodafone’s results “robust” and noted the new dividend policy should be well received.
The upward movement of the index is likely due to a combination of factors, including macroeconomic data suggesting a potential easing of monetary policy and strong performance from key constituent companies. This indicates a positive outlook for the index, potentially attracting further investment as investors anticipate future growth and dividend payouts.