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stock prices London The stock market closed in the green on Thursday after the Bank of England’s decision to cut rates and the European Central Bank’s ban.
In a split vote, the bank’s Monetary Policy Committee (MPC) voted five to four to cut interest rates by 25 basis points, taking the bank rate from 4% to 3.75%.
Five MPC members including the Governor Andrew Baileysupported the cut, noting that the risks to inflation continue to diminish.
AJ Bell’s Laith Khalaf said: “The Christmas rate cut will bring some much-needed financial joy to households and businesses across the country, especially those struggling to keep the show going.
“But there were definite signs of arrogance in the minutes of the MPC meeting.”
Mr Khalaf further said: “inflation There are now hopes of getting closer to the 2% target in the spring… but that has failed to move the dial significantly for some members of the rate-setting committee.
“The vote to cut rates was still close, with four members wanting to keep rates at 4%… This suggests they may be concerned about the U-shaped trajectory for (consumer price inflation) settling at rates above 2% over the medium term.”
The analyst concluded: “Overall, the rhetoric and tone of the committee minutes appear to be based on reining in bullish sentiments. Despite the rate cut, the Bank remains in a cautious posture, wary of both persistent inflation and policy errors.”
The FTSE 100 index rose 63.45 points, 0.7%, to close at 9,837.77. The FTSE 250 rose 160.83 points, 0.7%, to close at 22,325.59, and Objective The All-Share closed up 4.88 points, 0.7%, at 756.36.
In European shares on Thursday, the CAC 40 closed 0.8% higher in Paris.
The European Central Bank (ECB) left interest rates unchanged on Thursday as expected amid improved economic forecasts.
The decision keeps the interest rates on deposit facility, main refinance operations and marginal lending facility unchanged at 2%, 2.15% and 2.4% respectively.
Richard Carter of Quilter Cheviot said: “The ECB’s decision to keep its grip on rates is a surprise to no one, and 2026 is likely to be similarly uneventful unless there is a significant change in the economic outlook.
“Most economists expect rates to remain unchanged over the next year, especially after Christine Lagarde reaffirmed her belief that current monetary policy is in good shape.
“Although a rate cut cannot be completely ruled out if inflation continues to rise, any changes in the near term are likely to be minimal.”
At the time of closing of the London Stock Exchange on Thursday, the price of the pound was $ 1.3387, while on Wednesday it was $ 1.3359. It had bought $1.3356 just before the bank’s rate decision.
The euro stood at $1.1730, down from $1.1749. Against the yen, the dollar was trading at 155.46 yen compared with 155.55 yen.
Stocks were higher in New York. The Dow Jones Industrial Average was up 0.9%, the S&P 500 index was up 1.4% and the Nasdaq Composite was up 1.9%.
The yield on US 10-year Treasuries was quoted at 4.11%, down from 4.17%. The yield on the US 30-year Treasury was quoted at 4.79%, down from 4.83%.
At the time of closing of the London Stock Exchange on Thursday, Brent oil was quoted at $ 60.23 per barrel, which was $ 59.91 late on Wednesday evening.
Gold rose to $ 4,370.61 an ounce from $ 4,326.25.
Back to the London Stock Exchange, whitebread The FTSE 100 rose 6% after activist investor Corvex Management LP took a more than 6% stake in the Bedfordshire, England-based hotel and restaurant owner.
Corvex said the Premier Inn owner trades at a discount not only to its “fundamental value” but to the value of its UK freehold hotel portfolio alone, and urged Whitbread to commission a third-party strategic review of its capital allocation priorities.
In response, a Whitbread spokesperson said the company “has a clear strategy and business model, and our five-year plan is designed to deliver strong returns for shareholders through growth in both the UK and Germany”.
Referring to the UK government’s budget announcement last month, which increased business rates for some properties, the spokesperson said: “We run our business for the long term but remain flexible and, as stated in our announcement on 28 November, we are exploring various options to drive profits, margins and returns in light of the impact of the measures in the UK budget.”
BP increased by 0.1%. The London-based oil major’s chief executive Murray Auchincloss is to step down on Thursday to be replaced by Woodside Energy boss Meg O’Neill.
Carol Hawley, current executive vice president, Supply, Trading and Shipping, BP, will serve as interim chief executive until Ms. O’Neill joins on April 1, 2026.
Ms. O’Neill has been Chief Executive of Woodside Energy since 2021, where she oversaw the acquisition of BHP Petroleum International.
On AIM, Techmar rose 19%. The technology and services provider to the offshore energy industry announced it has won a “significant contract award” worth more than $8 million with an existing engineering, procurement and construction customer.
Techmar will provide its services to “major UK offshore wind farms”, and said the deal reflects “its track record in providing reliable, technically robust safety technology”.
Small-cap Topps Tiles lost 6.3% after the tile retailer went ex-dividend, meaning new buyers are not eligible for the latest payout.
However, its stock is still up 14% this year.
The biggest risers on the FTSE 100 were Whitbread, which rose 146.3p to 2,591.3p; Rolls-Royce, up 42p at 1,144p; Rentokil Initial, up 15.8p to 448.5p; Melrose, up 14.8p at 565.4p; and Smiths, up 62p at 2,394p.
The biggest fallers on the FTSE 100 were United Utilities, which fell 18p to 1,185p; GSK, down 21p at 1,812.5p; Banzel, down 18.4p at 420.4p; Pershing Square, up 36p at 4,932p; and Coca-Cola Europacific, down 50p at 6,88p.
In Friday’s economic calendar, UK consumer confidence, retail sales and public sector net borrowing.
In Friday’s UK corporate calendar, Carnival and WH Smith published their full-year results.
Contributed by Alliance News.