London Stocks Rise Amid Global Interest Rate Shifts

London's stock market saw an uptick as the FTSE 100 index closed 0.2% higher. This aligns with broader European gains after the U.S. Federal Reserve's interest rate cut. The Bank of England held steady, while UK inflation reached its highest among major economies, influencing market dynamics.

London's stock market emerged victorious on Thursday, with the FTSE 100 index climbing 0.2% amid widespread European gains. This comes as the U.S. Federal Reserve slashed interest rates for the first time this year. In contrast, the Bank of England held its rates steady, adjusting its economic growth outlook slightly upward.

Stefan Koopman, Rabobank's senior macro strategist, noted the meeting provided limited new policy direction. He suggested a significant drop in inflation could trigger further rate cuts before year's end—a scenario he deemed unlikely. Meanwhile, UK inflation reached the highest level among advanced economies in August, with 10-year and 30-year gilt yields seeing a modest rise, and the pound dipping 0.6% against the dollar.

European markets mirrored London's trajectory, buoyed by expected cuts from the Fed aimed at averting workforce declines. London's chemicals sector outperformed, though precious metal miners lagged. In midcaps, Jupiter Fund Management surged 12% following a Peel Hunt rating boost, while Pets at Home and Next faced declines due to executive departures and cautious trading outlooks, respectively.

(With inputs from agencies.)