Banks lead London stocks lower ahead of expected BoE rate hike

Bank stocks led London's exporter-heavy FTSE 100 lower on Thursday, as the pound strengthened ahead of what will likely be the Bank of England's 11th straight interest rate hike later in the day. The FTSE 100 fell 0.4% by 0805 GMT, after recording its highest closing level in more than a week on Wednesday.

Bank stocks led London's exporter-heavy FTSE 100 lower on Thursday, as the pound strengthened ahead of what will likely be the Bank of England's 11th straight interest rate hike later in the day.

The FTSE 100 fell 0.4% by 0805 GMT, after recording its highest closing level in more than a week on Wednesday. The pound rose against the dollar after the Federal Reserve raised interest rates by an expected 25 basis points (bps) on Wednesday, but indicated it was on the verge of pausing further increases after a global banking rout.

The focus now shifts to the BoE, which is widely expected to also raise its lending rate by 25 bps at 1200 GMT. Expectations had shifted sharply after data on Wednesday showed an unexpected rise in UK inflation. UK banks lost 1.1% in early trade after two straight days of gains.

The FTSE 250 midcap index fell 0.2%. Informa dropped 1.7% after Morgan Stanley cut its rating on the events organizer's stock to "equal-weight" from "overweight".

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