The blue-chip FTSE 100 was down 0.1%, but was up as much as 0.6% before the central bank’s decision. British government bond yields rose and the pound cut some of its earlier losses.
Shares of investment banking and brokerage services were the top losers, falling 2.7%, while rate-sensitive banks and real estate stocks slipped 1.1% and 1.6%, respectively.
The BoE said it would “keep under review for how long Bank Rate should be maintained at its current level”. Officials at the U.S. Federal Reserve and European Central Bank have been more explicit that rate cuts are on the agenda.
“It’s just pushed things to the right. The chances of rate cuts starting sooner have been diminished and the market has pushed out its expectation by a few months but the direction of travel hasn’t changed, it’s just the timing,” said Ben Russon, portfolio manager and co-head of UK Equities at Martin Currie, part of Franklin Templeton.
The midcap FTSE 250 dropped 1.2%, adding to losses from before the BoE decision. Both the FTSE indexes ended January with their worst monthly performance since October 2023, as investors reined in bets of aggressive interest rate cuts this year. Wall Street closed sharply lower on Wednesday after the Fed held interest rates steady, while dashing hopes for a cut as soon as March.
Shell climbed 2.4% to a more than three-week high after the energy major increased its dividend by 4% and extended its share repurchases following a better-than-expected fourth-quarter adjusted profit.
(You can now subscribe to our ETMarkets WhatsApp channel)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
