The FTSE 100 soared to an all-time high on Thursday following the Bank of England’s decision to cut interest rates, injecting fresh momentum into London’s financial markets.
FTSE 100 Surges Amid Interest Rate Cuts
London’s leading stock index jumped by 104 points, marking a 1.2% rise and closing at a record 8,727. The rally was driven by investor optimism following the central bank’s move to lower interest rates to 4.5%.
Despite the rate cut, the Bank of England delivered a cautious economic outlook, forecasting a lower-than-expected GDP growth of just 0.75%. Additionally, policymakers signaled that interest rates could rise faster than previously anticipated.
Market Reactions: Pound Volatility and Investor Sentiment
The pound initially plunged by over 1.1% against the US dollar before rebounding to a 0.6% decline, closing at 1.244. It also dipped 0.3% against the euro, settling at 1.199.
Bank of England Governor Andrew Bailey assured investors that further rate cuts could be on the horizon, fueling further gains in the stock market.
Danni Hewson, an analyst at AJ Bell, described the announcement as providing “a shot of adrenaline” to the markets.
“The interest rate cut from the Bank of England comes with warnings of weak growth and inflation risks, but investors focused on the likelihood of additional rate cuts later this year,” Hewson explained.
European and US Market Performance
Across Europe, France’s Cac 40 and Germany’s Dax both recorded 1.5% gains. In the US, Wall Street saw mixed results, with the S&P 500 rising by 0.2%, while the Dow Jones slipped by 0.3%.
FTSE 100 Movers: AstraZeneca Leads the Rally
AstraZeneca shares surged by 7% after reporting a 20% rise in annual revenue, fueled by strong sales in its oncology division. Meanwhile, car dealership Vertu Motors announced job cuts, citing higher operational costs from the latest Budget.
Shares of Vertu Motors dropped by 7.5% in response.
Top FTSE 100 Gainers and Losers
The biggest risers on the FTSE 100 were:
AstraZeneca (+660p to 11,786p)
Antofagasta (+88.5p to 1,783.5p)
Anglo American (+118p to 2,450p)
easyJet (+24.2p to 529.2p)
Barclays (+12.2p to 307.5p)
The biggest fallers included:
SSE (-53p to 1,568.5p)
Centrica (-4.05p to 137.85p)
London Stock Exchange (-335p to 11,760p)
Pearson (-30.5p to 1,321.5p)
Compass Group (-56p to 2,734p)
Final Thoughts
With the Bank of England signaling potential future rate cuts, investor confidence in the UK stock market remains high. The FTSE 100’s record performance underscores growing optimism, even amid economic uncertainties. As global markets react to interest rate shifts, traders will closely watch upcoming economic data and central bank decisions for further market direction.
