London's FTSE 100 hits record for fourth session after BoE signals rate cuts

The FTSE 100 has risen more than 8% so far this year, more than double its 3.8% gain in 2023, benefitting from a slowdown in inflation and renewed hopes of interest rate cuts, along with strong performances from multinational conglomerates. "All-time highs for the FTSE 100 is extremely encouraging and may help change the narrative away from one focused on the exodus of big business from London’s public markets, towards one more focused on the opportunities within UK Plc for investors instead," said Victoria Scholar, Head of Investment at interactive investor.

Britain's FTSE 100 hit a record high for a fourth straight session on Thursday after the Bank of England held interest rates but indicated that more policymakers are warming up to a cut in borrowing costs soon.

The blue-chip index ended the session 0.3% higher, after rising as far as 8,396.25 points earlier in the day, while the mid-cap FTSE 250 added 0.2% to a 15-month high. The FTSE 100 has risen more than 8% so far this year, more than double its 3.8% gain in 2023, benefitting from a slowdown in inflation and renewed hopes of interest rate cuts, along with strong performances from multinational conglomerates.

"All-time highs for the FTSE 100 is extremely encouraging and may help change the narrative away from one focused on the exodus of big business from London’s public markets, towards one more focused on the opportunities within UK Plc for investors instead," said Victoria Scholar, Head of Investment at interactive investor. The BoE's Monetary Policy Committee voted 7-2 to keep rates at a 16-year high of 5.25%. However, Governor Andrew Bailey said it was possible the central bank would need to cut rates by more than investors currently expect.

Money markets are fully pricing in an August rate cut while placing about a 44% chance on a cut in June. Much will depend on upcoming wage settlement and inflation data. Heavyweight industrial metal miners led sectoral gains with a rise of 1.3%, while precious metal miners were 0.9% higher as metal prices rose following soft U.S. jobs data that reinforced Federal Reserve rate cut bets.

Harbour Energy, the largest British North Sea oil and gas producer, was the biggest gainer on the FTSE 250, gaining 7.7% after it said it expects to generate significantly higher free cash flow next year. 3i Group was the biggest faller on the FTSE 100, down 5.2%, after the multinational private equity and venture capital firm's annual total return fell.

HSBC Holdings slipped 1.9% as it traded ex-dividend.

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