FTSE slumps as Bank of England holds interest rates
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London’s top equity markets slid in value in the wake of the latest major central bank interest rate decisions, despite a strong session for water firms. Sentiment was weak on Thursday across the global markets after traders digested a sell-off on Wall Street in the previous session.
US stocks has been hit by comment from Federal Reserve chairman Jerome Powell that tempered expectations for further cuts next year. London stocks were largely in the red at the start of trading and remained weak despite the Bank of England holding interest rates at 4.75%.
The FTSE 100 finished 93.79 points, or 1.14%, lower to end the day at 8,105.32. Elsewhere in Europe, German stocks recorded their fifth consecutive day of losses as the Fed decision offset any positivity around stronger-than-expected consumer confidence data.
The Cac 40 ended 1.22% lower for the day and the Dax index was down 1.2%. Stateside, US stocks bounced back in attempt to end a 10-day streak of losses for the Dow Jones. In currency, the pound spent much of the day in positive territory but slumped in afternoon trading despite the Bank of England holding interest rates.
Traders chose to focus their attention of predictions of weak GDP growth, with economists predicting the central bank could opt for a cut in February. The pound was down 0.34% at 1.252 US dollars but down 0.45% at 1.208 euros. In London’s equity markets, water firms Severn Trent and Pennon both made gains after industry regulator Ofwat said firms could increase customer bills by more previously expected.
