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Stocks in London were fractionally higher on Thursday afternoon after the Bank of England announced a 25 basis point interest rate cut, as expected, with investors now awaiting a decision by the European Central Bank, with a hold predicted. Sterling, meanwhile, remained below $1.34 but did perk up. The pound rose to $1.3380 early Thursday afternoon, from $1.3359 at the time of the London equities close on Wednesday. It had bought $1.3356 moments before the decision. The FTSE 100 index traded up just 2.25 points at 9,776.57. It was up some 0.2% before the decision. The FTSE 250 was up 11.46 points, 0.1%, at 22,176.22, and the AIM All-Share was up 1.12 points, 0.1%, at 752.60. The Cboe UK 100 was down fractionally at 979.53, the Cboe UK 250 was up 0.1% at 19,284.85, and the Cboe Small Companies was up 0.1% at 17,265.75. The BoE cut bank rate to 3.75% from 4.00%, as expected. Five, including Governor Andrew Bailey, supported the cut. Four preferred to maintain bank rate, ‘placing greater weight on prolonged inflation persistence’. The BoE governor sees ‘scope for some additional policy easing’ but cautioned ‘the path for bank rate cannot be pre-judged with precision’. The BoE said: ‘The extent of further easing in monetary policy will depend on the evolution of the outlook for inflation. The restrictiveness of policy has fallen as bank rate has been reduced by 150 basis points since August 2024. On the basis of the current evidence, bank rate is likely to continue on a gradual downward path. But judgements around further policy easing will become a closer call.’ UK consumer prices rose 3.2% year-on-year in November, slowing from 3.6% in October, and well below FXStreet-cited consensus of 3.5%, according to data published by the Office for National Statistics on Wednesday. The CAC 40 in Paris was up 0.2%, while Frankfurt’s DAX 40 was up 0.3%. The euro faded to $1.1723 midday Thursday from $1.1749 at the time of the London equities close on Wednesday. Against the yen, the dollar rose to JP¥155.72 from JP¥155.55. After the Bank of England, eyes shift to the European Central Bank later on Thursday and the Bank of Japan on Friday. The ECB is expected to hold, and the BoJ to hike. The yield on the 10-year US Treasury narrowed to 4.13% early Thursday afternoon from 4.17% late Wednesday afternoon. The 30-year yield eased to 4.81% from 4.83%. ‘The BoE’s counterparts at the European Central Bank are also set to announce their decision on rates today, with no change anticipated. Delayed US inflation data is also likely to be scrutinised later as investors look for some clues about what direction the Federal Reserve might take next year,’ AJ Bell analyst Russ Mould commented. Annual US consumer price inflation is expected to have accelerated to 3.1% in November from 3.0% reported for September. The October reading was cancelled due to a government shutdown. A barrel of Brent fell to $59.55 on Thursday afternoon, from $59.91 at the time of the London equities close on Wednesday. Gold was flat at $4,326.11 an ounce against $4,326.25. Sky Links Capital analyst Daniel Takieddine commented: ‘Markets are awaiting the CPI release later today. If inflation remains stable or shows signs of cooling, expectations of additional Federal Reserve rate cuts could strengthen, weighing on yields and the dollar and supporting gold. Conversely, any upside surprise in inflation could reinforce higher yields and lend support to the dollar, potentially capping bullion’s advance.’ In New York, the Dow Jones Industrial Average is called up 0.3%, the S&P 500 up 0.5% and the Nasdaq Composite 0.8% higher. The trio had closed lower on Wednesday. Analysts at Deutsche Bank commented: ‘Interestingly, it had appeared yesterday as though markets might finally stabilise. But the first loss of momentum came after that FT report, which heightened concerns around a potential AI bubble, and meant that Oracle’s 5yr credit default swaps climbed to 156bps, their highest since the great financial crisis. The other problem is the AI fears are interacting with growing concerns around the US outlook, particularly after we found out the unemployment rate hit a 4-year high in November. So tech stocks led yesterday’s declines.’ Premier Inn owner Whitbread shares rose 5.8%. Corvex Management said it has taken a more than 6% stake in Whitbread, saying the UK hospitality firm trades at a discount not only to its ‘fundamental value’ but at a discount to the value of its UK freehold hotel portfolio alone. Corvex urged Whitbread to commission a third-party strategic review of its capital allocation priorities. ‘In our view, the current share price appears to ascribe no value to several meaningful components of the company’s business,’ Corvex said, ‘including its UK operated leasehold portfolio, its German hotel assets, and its development properties currently under construction and not yet trading.’ Corvex said it had not ‘predetermined any particular outcome’ to the strategic review. However, it said, ‘we believe the board of directors should review the company’s current five-year capital plan, which contemplates approximately £3.5 billion of investment - an amount approaching the company’s current market capitalisation.’ In response, a Whitbread spokesperson said the company ‘has a clear strategy and business model, and our five-year plan is designed to deliver strong returns for shareholders through growth in both the UK and Germany.’ Pest control and hygiene firm Rentokil rose 3.1%. Bank of America lifted the stock to ’buy’ from ’neutral’. Currys surged 9.7%. It reported an acceleration in sales growth during the first half of its financial year and declared a dividend after passing on a payment last year. Currys said unaudited pretax profit in the half-year ended November 1 amounted to £9 million, swinging from a loss of £10 million. On an adjusted basis, it rose to £22 million from £9 million. Revenue improved 8.0% to £4.23 billion from £3.92 billion, Currys said, or by 4% on a like-for-like basis. Sales grew by 6% in the UK & Ireland, and 11% in the Nordics, or by 4% in both regions like-for-like. This showed an acceleration from the 3% LFL growth in the UK & Ireland, and 2% LFL growth in the Nordics reported in the first 17 weeks of the trading period. An interim dividend of 0.75p per share was declared compared to none a year ago. Surgical Innovations slumped 28%. The surgical and medical instrument manufacturer said sales so far in the last quarter of the year have been ‘softer than anticipated’. It puts this down to a ‘global flu epidemic’ which has hit key markets. Industrial action in the UK’s National Health Service has ‘compounded’ this. ‘Sales in December have also been adversely affected by a one-off quality issue relating to key components supplied by an OEM partner, which constrained our manufacturing of their product. The issues have been promptly addressed and supply is resuming, with normal deliveries expected in early 2026,’ it added. The company now expects revenue of around £11.5 million for the year, ‘with a commensurate impact on profits’. It had previously expected revenue of £11.8 million. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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