London stocks rise as investors digest Bank of England’s ‘hawkish’ hold
asserted
investors → rise → hold
In London, the FTSE 100 index ended up 127.67 points, 1.2%, at 10,816.14.
asserted
index → end → 10,816.14
The FTSE 250 advanced 281.94 points, 1.2%, to 24,352.14, and the AIM all-share climbed 4.27 points, 0.5%, to 792.63.
asserted
share → advance → 792.63
The Bank of England’s Monetary Policy Committee voted 6-3 to maintain bank rate at 3.75%, repeating July’s split, with Huw Pill, Megan Greene and Catherine Mann again backing a 25 basis point increase.
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Pill → vote → increase
But the unchanged vote concealed a shift within the majority.
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vote → conceal → majority
Five of the six members who supported a hold explicitly outlined circumstances that could lead them to vote for tighter policy, as the prolonged Middle East conflict pushes energy prices and the near-term inflation outlook higher.
uncertain
conflict → support → prices
Sarah Breeden said that a hike would be appropriate if “second-round effects crystallise”.
asserted
effects → say → ?
Clare Lombardelli said the “case for raising bank rate is building” and Dave Ramsden said that “there could be a case for increasing bank rate”.
Alan Taylor said the emergence of second-round effects “would build the case for tightening”.
uncertain
emergence → say → tightening
Kallum Pickering, chief economist & deputy head of research at Peel Hunt, said: “While the meeting decision was in line with our own call and with market pricing, the tone of the minutes has a more hawkish tilt compared to July.”
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tone → say → July
Mr Pickering still expects the Bank of England to hold at its November meeting but accepts the risks to that call have “grown”.
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risks → expect → call
He pointed out that with five of the six holders having set out the conditions for a hike, only two need to switch.
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two → point → hike
Citigroup analyst May Rostom thinks a quarter-point rate hike is on the cards in November.
uncertain
hike → think → November
“Overall, we think the MPC are bracing us for a hike in Q4,” she said, adding that everything rests on what happens in the Middle East.
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what → think → East
JPMorgan analyst Allan Monks said the Bank of England is “gearing” up to hike and sees rate increases in November and next February.
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Bank → say → November
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Mr Monks said the bigger surprise was the Bank of England shifting to multi-year guidance on quantitative tightening, with the intention of providing greater clarity on the path ahead.
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Bank → read → path
“This is a clear and assertive plan designed to reduce uncertainty at a time when market conditions are volatile,” he added.
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he → design → time
The pound was quoted at 1.3356 dollars on Wednesday, down from 1.3449 dollars at the same time on Wednesday.
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pound → quote → Wednesday
Against the euro, sterling fell to 1.1627 euro from 1.1658 euro.
asserted
sterling → fall → euro
In European equities on Thursday, the Cac 40 in Paris rose 0.6%, while the Dax 40 in Frankfurt added 0.8%.
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Dax → rise → %
In New York, the Dow Jones Industrial Average was up 0.5% at the time of the closing bell in London.
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Average → close → London
The S&P 500 rose 1.0%, and the Nasdaq Composite advanced 1.5%.
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Composite → rise → ?
Stocks rallied on Wall Street after Wednesday’s falls, which followed a quarter-point interest rate increase by the US Federal Reserve, the first in just over three years.
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which → rally → years
Fed chairman Kevin Warsh said inflation has been “too high and has been for too long” as he reiterated his aim to achieve price stability.
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he → say → stability
Analysts at Morgan Stanley noted that Mr Warsh characterised the hike as “removing accommodation, which we think suggests the Fed has more work to do.
uncertain
Fed → note → work
Combined with the discussion of ongoing geopolitical risks, we think this leans in the direction of more hikes than we previously expected”.
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we → combine → hikes
The bank expects the US central bank to raise rates again in December and in March 2027.
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bank → expect → March
The euro eased to 1.1480 dollars from 1.1537 dollars.
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euro → ease → dollars
Against the yen, the dollar was trading at 155.80 yen, up from 155.09 yen.
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dollar → trade → yen
Elsewhere, stocks took encouragement from a further modest drop in the oil price and lower bond yields.
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stocks → take → price
Brent oil was quoted at 103.65 dollars a barrel in London on Thursday, down from 104.54 dollars late on Wednesday.
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oil → quote → Wednesday
The yield on the US 10-year Treasury was quoted at 4.95%, narrowed from 4.97%.
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yield → quote → %
The yield on the US 30-year Treasury was quoted at 5.30%, trimmed from 5.34%.
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yield → quote → %
SSE rose 3.6% as Berenberg raised its share price target and reiterated a “buy” rating.
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Berenberg → rise → rating
Berenberg said an “unprecedented, extended and highly visible growth opportunity lies before SSE, which is not reflected in its valuation”.
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which → say → valuation
Elsewhere, Kingfisher perked up 2.9% as Deutsche Bank Research took the do-it-yourself retailer, which reports results next week, off its “sell” list.
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which → perk → list
Next climbed 2.5% as it raised profit guidance once more despite taking a more cautious view on UK growth.
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it → climb → growth
The Leicester-based clothing and homewares retailer now expects full-year pre-tax profit of £1.26 billion, raised modestly from £1.24 billion previously.
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retailer → base → billion
This would be up from £1.19 billion posted in the 52 weeks to January 31 2026.
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This → post → January
“The company’s ability to manage expectations is unrivalled and once again it has delivered results materially ahead of previous expectations,” said AJ Bell investment director Russ Mould.
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Mould → manage → expectations
Despite the overall profit upgrade, Next reduced guidance for full-year sales growth in the UK to 2.0% from 2.8%.
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Next → reduce → %
…and 8 more, not listed.
The Aporia
