London close: FTSE 100 retreats from record high as BoE holds rates steady

London Close: FTSE 100 Pulls Back After Record High

UK stocks ended Thursday lower as investors cashed in profits following a recent rally, influenced by the Bank of England's interest rate decision and ongoing concerns about the economy.

Market Movements

Sharp declines in Frankfurt and Paris, combined with a weak start on Wall Street, dampened market sentiment in afternoon trading. The FTSE 100 closed 0.4% down at 9,735.78, retreating from Wednesday’s record high of 9,777.08.

Strong gains in banks, miners, and retailers were offset by significant drops in blue-chip stocks including Hikma, Smith & Nephew, Diageo, and Convatec.

Bank of England Interest Rate Decision

The Monetary Policy Committee (MPC) meeting was the highlight of the day. The BoE voted 5-4 to keep the borrowing cost steady at 4%, breaking its usual pattern of alternating rate cuts at every other meeting.

Despite sluggish economic growth, inflation remains stubbornly high. The consumer price index (CPI) stands at 3.8%, down from recent peaks but still above the Bank’s 2% target.

“Today’s decision clearly opens the door to a December cut, but that remains contingent on the incoming data,” said Matt Swannell, chief economic advisor to the EY ITEM Club.

“If there are further signs of falling inflationary pressures in the coming months and if the bulk of the tax rises expected at the Autumn Budget are introduced almost immediately, then there might be a slim majority on the Committee in favour of a Christmas cut."

Summary

The FTSE 100 retreated after reaching record levels as the Bank of England held rates steady amid inflation concerns and economic uncertainty, leaving the door open for potential easing in December.

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Sharecast Sharecast — 2025-11-06

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