Market Shocks: FTSE 100 Plummets Amid Global Rate Projections

Britain's FTSE 100 faced a significant drop as U.S. and UK interest rate expectations shifted, impacting market sentiment. The Federal Reserve's revised outlook for fewer rate cuts in 2025 and the Bank of England's steady rates amidst slowing economic growth led to investor caution, affecting stocks globally.

Britain's FTSE 100 index suffered a downturn to a four-week low on Thursday, driven by divergent monetary policies. The U.S. Federal Reserve's projection of fewer rate cuts in 2025 contrasted with expectations, leading to global market adjustments.

The Federal Reserve's anticipated two 25 basis point cuts for 2025, less than previously forecasted, amplified caution among investors, as highlighted by Chris Beauchamp of IG. Concurrently, the Bank of England maintained its interest rate at 4.75%, despite economic signals discouraging rapid rate reductions.

Sector-wise, real estate and industrial metals faced declines, while water utilities rose. The market sentiment on the UK remained cautious amid stagflation concerns, evidenced by HSBC's outlook. Amidst sectoral volatility, Serco Group saw notable gains on the FTSE 250.

(With inputs from agencies.)