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London stocks closed lower on Thursday after the Bank of England held interest rates steady in a tight vote, on a busy day for investors to digest earnings from major firms. The FTSE 100 index closed down 41.30 points, 0.4%, at 9,735.78. The FTSE 250 ended 189.35 points lower, 0.9%, at 21,905.03, and the AIM All-Share fell 3.09 points, 0.4%, at 753.13. The Cboe UK 100 was down 0.6% at 969.72, the Cboe UK 250 was 1.2% lower at 18,935.03, and the Cboe Small Companies fell 0.5% at 17,896.75. The Bank of England kept rates on hold in a knife-edge vote with the decision of Governor Andrew Bailey proving decisive. Five members of the nine strong Monetary Policy Committee, including BoE Governor Bailey, voted for the status quo. Bailey was joined by Clare Lombardelli, Catherine Mann, Megan Greene and Huw Pill. Four MPC members, Sarah Breeden, Swati Dhingra, Dave Ramsden, Alan Taylor put the case for a quarter point cut. Dhingra and Taylor argued policy was already ‘significantly over-restrictive, which could unduly damage activity and possibly lead to an undershoot in inflation in the medium term.’ But others on the MPC placed greater weight on risks of persistence in inflation, requiring more prolonged monetary policy restriction. Bailey judged that the overall risks to medium-term inflation had moved down to become more balanced recently but felt there was value in waiting for further evidence. It represents a second successive hold and the first time this year that Threadneedle Street has gone two meetings in a row without cutting. So far this year, it has reduced bank rate in February, May and August, so every other meeting. The decision was as forecast by market consensus, although softer than expected inflation and a weakening labour market prompted some analysts to predict a quarter point cut. In the accompanying statement, the MPC said the risk from greater inflation persistence has become ‘less pronounced’ recently, and the risk to medium-term inflation from weaker demand ‘more apparent’, such that overall the risks are now more balanced. But more evidence is needed on both, it added, and future rate reductions will therefore depend on the evolution of the outlook for inflation. ‘If progress on disinflation continues, Bank Rate is likely to continue on a gradual downward path,’ the MPC said. ING said while the BoE may have left rates on hold, its latest decision ‘leaves us more convinced’ that a rate cut is coming in December. ‘Everything hinges on Governor Andrew Bailey’s vote and his comments make it abundantly clear that he is siding with the doves,’ ING added. Sandra Rhouma, European economist at AllianceBernstein agreed. ‘The door is wide open for a rate cut in December and only a re-acceleration in inflation or an inflationary budget can close it,’ she said. Despite the perceived ’dovish’ hold, the pound traded higher against the dollar as the greenback gave up recent gains across the board. Sterling was quoted at $1.3106 at the time of the London equities close on Thursday, higher compared to $1.3037 on Wednesday. The euro stood at $1.1536, up against $1.1476. Against the yen, the dollar was trading lower at JP¥153.12, compared to JP¥154.23. Despite the falls, the FTSE 100 outperformed European and US peers. In European equities on Thursday, the CAC 40 in Paris closed down 1.4%, while the DAX 40 in Frankfurt ended 1.3% lower. Stocks in New York were also lower at around the time of the London close. The Dow Jones Industrial Average was down 0.9% as was the S&P 500 index, while the Nasdaq Composite declined 1.6%. The renewed falls on Wall Street came as a report said job cuts jumped in October as companies adjusted staffing levels during the artificial intelligence boom. According to outplacement firm Challenger, Gray & Christmas, job cuts for the month totalled 153,074, a 183% surge from September and 175% higher than the same month a year ago. It was the highest level for any October since 2003. The yield on the US 10-year Treasury was at 4.09%, narrowed from 4.15% on Wednesday. The yield on the US 30-year Treasury was quoted at 4.68%, down from 4.72%. In London, investors weighed a deluge of earnings and trading updates. In the winners’ enclosure, grocer J Sainsbury, up 5.5%, which raised profit guidance amid strong sales, and IMI, up 3.8%, which reiterated full-year guidance and said it was on track to deliver a fourth consecutive year of mid-single digit organic revenue growth. Also climbing AstraZeneca, up 3.1%, after third quarter sales beat expectations which it said sets it up well to sustain growth through 2026. Banks were in demand after a report in the Financial Times said the sector would be spared from tax rises in the budget - NatWest rose 2.1%, Lloyds Banking Group 1.8% and Barclays 0.6%. But faring less well, Hikma Pharmaceuticals, down 14% as it reduced medium term guidance and cut the top-end of its 2025 core operating profit view amid a delayed start to production at a US site. Also firmly in the red, Smith & Nephew, down 11% as third quarter revenue fell short of consensus. The medical device manufacturer said revenue in the third quarter to September 27 improved 6.3% on-year to $1.50 billion from $1.41 billion. Revenue fell short of company-compiled consensus of $1.51 billion. Elsewhere, Diageo fell 6.5% as it lowered guidance despite third quarter sales coming in ahead of expectations. London-based Diageo, which owns Smirnoff vodka, Johnnie Walker whisky and Guinness, said sales growth in Europe, Latin America & Caribbean and Africa was offset by weakness in Chinese white spirits impacting Asia Pacific results and softer performance in North America reflecting weak consumer confidence. Brent oil was quoted lower at $63.25 a barrel at the time of the London equities close on Thursday, from $64.35 late Wednesday. Gold traded little changed at $3,977.52 an ounce against $3,978.61. The biggest risers on the FTSE 100 were J Sainsbury, up 18.60 pence at 355.80p, IMI, up 90.00p at 2,492.00p, Antofagasta, up 93.00p at 2,746.00p, Fresnillo, up 74.00p at 2,220.00p and Auto Trader, up 24.60p at 798.60p. The biggest fallers on the FTSE 100 were Hikma Pharmaceuticals down 249.00p at 1,522.00p, Smith & Nephew, down 151.50p at 1,242.00p, Diageo, down 117.50p at 1,680.00p, Howden Joinery, down 51.00p at 820.00p and Pearson, down 50.50p at 1,002.50p. Friday’s global economic calendar has unemployment figures in Canada, trade data in Germany, Halifax price index in the UK and the Michigan consumer sentiment index in the US. Friday’s UK corporate calendar has half year results from specialist currency and asset manager Record. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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