Stocks dip as Bank of England leaves interest rates unchanged
The FTSE 100 index closed down 51.67 points, 0.6%, at 8,791.80. The FTSE 250 ended 216.27 points lower, 1.0%, at 21,073.99, and the AIM All-Share fell 5.17 points, 0.7%, at 758.19.
The London Stock Exchange celebrated the 30th anniversary of AIM on Thursday, calling it a 'cornerstone' of the UK's capital markets.
Since its launch in 1995, AIM has become one of the world's most successful growth markets, helping more than 4,000 companies raise over £136 billion.
The decision to hold rates by the Bank's Monetary Policy Committee was widely expected, although the vote split was slightly more dovish than forecast.
The MPC voted 6-3 for the status quo, with Swati Dhingra, Bank deputy governor Dave Ramsden and Alan Taylor preferring a 25 basis point rate cut to 4.00%.
The Bank said there remain 'two-sided' risks to inflation meaning 'a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate'.
The Bank noted that higher food prices could raise 'inflation expectations, impacting wage and price-setting behaviours'.
Bank of England governor Andrew Bailey said interest rates remain on a 'gradual downward path'.
Ebury analyst Matthew Ryan said: 'The BoE still appears to be in no hurry to speed up the pace of policy loosening. Importantly for markets, the phrase that cuts will be both 'gradual and careful' was retained in the statement – there was some speculation that this could be either tweaked or jettisoned.'
ING noted past experience has shown that the vote split contains few useful signals.
'December's meeting saw a similar 6-3 vote, yet heralded little change in the bank's overall stance,' ING said.
It added that rate hawks will have an eye on oil prices.
A 'serious spike in oil prices is the most obvious hawkish risk for the UK rate outlook', ING said.
Nonetheless, ING expects the Bank to cut interest rates in August.
The oil price rose again amid concerns the situation in the Middle East could worsen.
Brent oil traded higher at 78.59 US dollars a barrel late on Thursday from 75.06 dollars on Wednesday as the Israel-Iran conflict continued.
The oil price rise boosted oil majors and FTSE 100 heavyweights BP and Shell, which rose 1.4% and 1.1% respectively, but weighed on British Airways owner IAG, down 3.2% and low-cost airline easyJet, down 3.0%, on concerns of rising fuel costs and travel disruption.
Israel's defence minister Israel Katz said Iran's Supreme Leader Ayatollah Ali Khamenei cannot 'continue to exist', days after reports that Washington vetoed Israeli plans to assassinate him, AFP reported.
'Khamenei openly declares that he wants Israel destroyed – he personally gives the order to fire on hospitals,' Mr Katz told journalists.
'Such a man can no longer be allowed to exist.'
US President Donald Trump wrote on Tuesday that the US knew Mr Khamenei's location but would not kill him 'for now'.
Uncertainty surrounds Mr Trump's next move amid reports that the US is ready to intervene in the conflict.
Bloomberg on Thursday reported senior US officials are preparing for the possibility of a strike on Iran in coming days.
In European equities on Thursday, the Cac 40 in Paris closed down 1.1%, as did the Dax 40 in Frankfurt.
Financial markets in the US were closed to mark Juneteenth National Independence Day.
The pound was quoted down at 1.3429 dollars at the time of the London equities close on Thursday, compared with 1.3472 dollars on Wednesday.
On the FTSE 100, fears the Middle East conflict will lead to higher inflation and slower economic growth weighed on mining stocks.
Anglo American fell 3.3%, Antofagasta declined 3.4% and Rio Tinto dipped 2.5%.
Whitbread fell 1.6% after reporting total group sales fell by 3.8% to £710.9 million in the 13 weeks that ended May 29, the first quarter of its financial year, from £739.2 million a year earlier, or by 1% on a like-for-like basis.
Total UK sales were down 5.4% to £648.2 million from £685.2 million. Accommodation sales fell 1.8% to £485.0 million from £494.1 million, while food and beverage revenue sales dropped 15% to £163.2 million from £191.0 million.
UK revenue per available room fell 2.4% to £62 in the quarter from £63.54 a year ago.
On the FTSE 250, Hays plunged 10% after saying it expects annual profit to be below market consensus, as the staffing firm grapples with challenging market conditions.
AJ Bell's Russ Mould said the share price slump implies the jobs market is going from bad to worse.
'Companies are clearly worried about the economic outlook and they're reluctant to take on full-time staff, potentially not replacing anyone lost to natural turnover. At the same time, individuals are worried that if they move job they'll be in the 'last in, first out' firing line if companies look for new cost savings,' he added.
Hays said permanent recruitment markets have been particularly damaged, amid 'low levels of client and candidate confidence'.
Simon Lechipre, analyst at Jefferies, said the weaker than expected performance is particularly negative for Page Group where permanent recruitment makes up 72% of group fees.
Shares in PageGroup fell 8.8% while Robert Walters dropped 4.8%.
Hays expects annual pre-exceptional operating profit of £45 million, below company-compiled consensus of £56.4 million.
The yield on the US 10-year Treasury was quoted at 4.39%, stretched from 4.36%. The yield on the US 30-year Treasury was quoted at 4.89%, widened from 4.86%.
Gold was quoted lower at 3,368.94 dollars an ounce against 3,387.84 dollars.
The biggest risers on the FTSE 100 were Melrose Industries, up 13.70p at 499.9p, BP, up 5.5p at 392.0p, Bunzl, up 28.0p at 2,250.0p, Shell, up 28.5p at 2,695.5p, and Vodafone, up 0.6p at 75.9p.
The biggest fallers were Persimmon, down 50.0p at 1,317.0p, Antofagasta, down 60.0p at 1,699.0p, Anglo American, down 68.5p at 2,021.5p, IAG, down 10.2p at 309.3p, and Airtel Africa, down 5.4p, at 171.2p.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
23 minutes ago
- Daily Mail
Class warfare is back under this spiteful government – and we will ALL end up paying a ruinous price: LEO MCKINSTRY
The current government is increasingly running not on a desire to improve the country, or out of any kind of political mission - but on sheer spite. Having failed to achieve the elusive economic 'growth' he and his inept Chancellor Rachel Reeves promised before the election, Sir Keir Starmer is now trying to revive his fortunes by stoking class envy.
BBC News
23 minutes ago
- BBC News
Premium Bonds: Unclaimed prizes from NS&I draws pass £100m
More than £100m of premium bond prizes remain unclaimed amid criticism that the government-owned bank which operates the savings scheme is not doing enough to find the the 2.5 million unclaimed prizes are 11 winners of £100,000 - the second-largest prize say the process to trace accounts needs reform as it is too difficult for people gifted Premium Bonds, or those who only ever had paper National Savings and Investments (NS&I) said it had paid more than 99% of the prize-winners since starting its tax-free draws in 1957. Wills and probate solicitor Patrice Lawrence said she had helped seven people trace accounts including clients, and friends and family."It's shocking that a government-owned bank is sitting on nearly £100m [in unclaimed prizes] that doesn't belong to it during a cost of living crisis," she told the Bonds are a lottery-style, government-backed savings account where people can put money in and take it out when they want. The amount of interest paid in return for each £1 bond is decided by a monthly prize draw, with some holders receiving nothing and others getting prizes from £25 all the way up to a £1m said every jackpot millionaire had received their money. Since the first draw in June 1957, its Electronic Random Number Indicator Equipment - known as ERNIE - has drawn a total of 772 million prizes worth a combined £ Bonds prize winners should receive notifications of their winnings via text message, email or post if they have registered their customers, however, relocate and forget to update their bond holdings are not registered. For example, people may be unaware they were gifted bonds as children, or they were never given the paper certificate carrying the account retail director Andrew Westhead said the bank recognised bonds purchased before digitisation were "much harder to trace". Nearly 23 million people had Premium Bonds accounts worth a combined £130bn, as of the end of March originally contacted winners by post and sent cheques, but since 2011 holders could choose to have prizes paid directly into a bank account or reinvested in more bonds. The oldest unclaimed prize was £25 won in November 1957 in South Westhead said: "The £103m of prizes currently unclaimed represents just 0.28% of the total £37bn awarded by ERNIE over nearly seven decades."He said the bank provided information online and through its call centre on how to claim winnings, publicised details of unclaimed prizes and encouraged customers to use its prize can also use its tracing service to track down mislaid bonds, he also said that, as of the end of March 2025, it had been asked to carry out 781,576 those, 465,048 were successful, and 443,806 accounts had been found with value. The bank could not say how many of those people had their original paperwork. Melanie Clarke did not initially know what was in front of her when she found premium bond papers among her late father Hugo's mother explained some were a gift for her and her sister, while some remained in her parents' said: "They're quite delicate and flimsy…[I thought of the papers] what part of that is important? How do I found out any information about this?"Mr Clarke first came from Trinidad to the UK as an RAF Serviceman, aged 19, as part of the so-called Windrush did not leave a will when he died from natural causes related to vascular dementia in clearing his possessions Ms Clarke misplaced the paperwork, and is now in a weeks-long exchange with NS&I trying to trace the believes many people of her generation would have been bought Premium Bonds when they were children, but will have little idea how to trace their Richardson, deputy editor at consumer group Which? Money, said NS&I was not signed up to the government's own Tell Us Once service or its private equivalent, the Death Notification Service. The schemes help bereaved people by simplifying the process of notifying multiple organisations after a bank said its services "often required more individualised contact with executors" than the Tell Us Once scheme, but it wanted to be "as easy to use as possible... during difficult events". 'Computer says no' BBC Morning Live's resident money expert Iona Bain said NS&I needed to consider how it could improve."In theory, it shouldn't be the end of the world if you don't have the original certificate, perhaps because they've been mislaid or damaged," she said. "NS&I encourages people to come forward even if they only have basic details, as these can be matched up with what's in the system. "But the reality is more complicated. The majority of traces may be successful, but too many people have been left unhappy with what they feel is a 'computer says no' approach, even when they believe they have most of the details needed to find a match. "Whilst it can be administratively complex to track down historic money, NS&I needs to consider how it can improve this process so it's much less rigid, bureaucratic and frankly disappointing." Miss Lawrence has begun a petition calling for reform so names, dates of birth and address at time of purchase would be enough to locate an difficulties she has highlighted include:a lack of awareness about premium bonds paperwork when it is found among a relative's possessions after they have diedpeople who had paper bonds bought for them when they were minors not being aware they had to take steps to have the bonds transferred to them when they reach 16people finding bond certificates that have a holder's number, date and location of purchase, but the NS&I being unable to tell them to whom they belong How can you find your account? NS&I's tracing service can be contacted online, by post or over the phone, if people do not have their bond number or NS&I can also use MyLostAccount which is associated with UK Finance and the Building Societies Association, and can be used to trace old accounts with other providers as well as NS& with original paper bonds such as those purchased over the counter at the Post Office can register them online or call the helpline on 08085 007 007.A request can also be made for a trace by someone who is legally entitled to act on someone else's behalf, for example under a Power of Attorney or by an executor of a will. More about this storyThe Shared Data Unit makes data journalism available to news organisations across the media industry, as part of a partnership between the BBC and the News Media more about the Local News Partnerships here.
Daily Mail
an hour ago
- Daily Mail
I've been forced to move in with my daughter after my third property sale fell through. The housing market's collapsing... and my removal man's terrifying words show exactly why: NADINE DORRIES
I'm a former Cabinet minister and best-selling novelist who sold my childcare business to Bupa for a seven-figure sum but, at the age of 68, I have just moved into a spare bedroom in the home of one of my daughters. I hadn't planned it this way, of course. It's only happened because my third consecutive property purchase has just fallen through after I had commissioned a survey and paid my solicitor's fees.
