FTSE 100 Hits Two-Week High as BoE Holds Steady on Rates

London's FTSE 100 rose by 0.8%, reaching a near two-week high after the Bank of England kept rates steady at 5.25%. Traders are now betting on a possible rate cut in August. Meanwhile, Ocado slumped as its Canadian partner paused a warehouse opening, while CMC Markets surged due to a positive income forecast.

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FTSE 100 up 0.8%, FTSE 250 up 0.6% *

Bank of England keeps rate steady at 5.25% *

Markets increase bets on quarter-point August rate cut *

Ocado slumps as Canadian partner pauses warehouse opening (Updated at 1550 GMT)

By Pranav Kashyap June 20 (Reuters) -

London's blue-chip stock hit a near two-week high on Thursday, as the Bank of England kept rates on hold as expected, with traders raising the prospects of a rate cut after policymakers' comments. The FTSE 100 logged its third straight day of gains, ending 0.8% higher. A 0.4% dip in the pound aided the exporter-heavy index's rise as dollar-earning firms' profits are boosted by a weaker sterling.

The more domestically focused mid-cap FTSE 250 added 0.6%. The BoE's Monetary Policy Committee voted 7-2 to keep rates at a 16-year high of 5.25% ahead of a July 4 election and some policymakers said their thinking was now "finely balanced".

Markets now see a 46.5% chance of a rate cut in August, compared with 30% before the rate decision. Governor Andrew Bailey said it was "good news" that official figures on Wednesday had shown inflation was back at its 2% target but added that it was too soon to cut rates.

"It is clear that the MPC wants to cut and begin dialing back the level of restriction in rates and is happy to look though some of the strength in recent services inflation data," said Jefferies economist Modupe Adegbembo. Precious metal miners led sectoral gains after bullion prices climbed to a two-week high as rising bets on U.S. rate cut boosted demand.

Automobiles and parts and retailers also advanced, while chemical stocks was in a weak spot. Shares of

Ocado fell 12% after the online supermarket's Canadian partner paused a planned opening of a Vancouver warehouse.

CMC Markets soared nearly 12.8% after the trading platform forecast higher operating income in 2025, aided by strong retail and institutional trading and tight cost control measures. Tate & Lyle fell 9% after the sweetener maker struck a $1.8 billion deal to buy U.S.-based CP Kelco from J.M. Huber Corp. Tate & Lyle's shares were also trading ex-dividend.