FTSE 100 rockets to fresh record high after 'dovish' BofE base rate cut The FTSE 100 was trading at a record high on Thursday afternoon as investors cheered a 'dovish' Bank of England base rate cut, despite forecasts of a worsening economic outlook.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said while the 'risks of stagflation are stark', two MPC members voting for a larger rate cut has increased market expectations for more rate cuts at a faster pace this year.
Base rate fell by 25 basis points to 4.5 per cent after a 7-2 vote of the bank's Monetary Policy Committee, with the two dissenting policymakers voting for a more aggressive cut of 50bps.
Four more 25bps rate cuts this year would take base rate to 3.5 per cent by December, where it last stood in January 2023.
'This is likely to lower the forward interest rate curve towards the MPC's forecast of 4 rate cuts this year which in turn should lower the mortgage rate.'.
