UK Markets Steady Ahead of Key Interest Rate Decisions

UK shares remained largely unchanged as investors anticipate decisions from the U.S. Federal Reserve and Bank of England on interest rates. While the FTSE 100 saw a minor rise, the focus remains on potential rate cuts aimed at economic stabilization amid inflation concerns. Market moves reflect mixed economic signals.

UK shares held steady on Monday as investors braced for pivotal interest rate announcements from the U.S. Federal Reserve and the Bank of England in the coming days.

The FTSE 100 index experienced a slight increase of 0.03% by 1142 GMT, maintaining a narrow trading range recently, while the FTSE 250 saw a decline of 0.2%. The upcoming U.S. central bank decision has global markets on edge, as division persists among policymakers on addressing job market health against the backdrop of high inflation.

According to CMEGroup's Fedwatch tool, there is an 87% probability of a 25 basis points rate cut this week, influenced by mixed economic indicators and Federal Reserve statements. In the UK, a weak job market raises questions ahead of Finance Minister Rachel Reeves' budget announcement. Single stock movements also drew interest, with Barratt Redrow falling 2% following a Citigroup target reduction and Unilever's minor dip during Amsterdam trading linked to a spinoff. Notably, SDCL Efficiency Income Trust's shares dropped significantly after breaching a debt-to-equity policy limit.

(With inputs from agencies.)