FTSE 100 rises as BoE keeps interest rates steady

UK's FTSE 100 cruised higher on Thursday, driven by rate-sensitive homebuilders and real estate stocks as the Bank of England (BoE) kept interest rates unchanged but dismissed the prospect of rate cuts any time soon.

UK's FTSE 100 cruised higher on Thursday, driven by rate-sensitive homebuilders and real estate stocks as the Bank of England (BoE) kept interest rates unchanged but dismissed the prospect of rate cuts any time soon. The exporter-focused FTSE 100 advanced 1.2% by 1228 GMT, while the mid-cap FTSE 250 jumped 3.1%.

The benchmark FTSE 100 was on track for its best day in over three weeks, while the mid-cap index was set for its best session since July. The BoE held interest rates at a 15-year peak of 5.25% as it kept up its fight against what has been the highest inflation among the world's big rich economies, and stressed that it did not expect to cut them any time soon.

The Monetary Policy Committee (MPC) voted 6-3 to keep the rate on hold, in line with economists' expectations in a Reuters poll. "The BoE is singing from the same tune as the Federal Reserve, and stayed firmly in the wait-and-see chorus," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

"There's a growing strength of feeling among policymakers that previous rate hikes need more time to feed through." Homebuilder shares rose 3.4%, while real estate stocks soared 6.1%.

The sterling strengthened 0.5% against the dollar after the BoE decision. A slew of upbeat corporate earnings also boosted the blue-chip index.

BT Group jumped nearly 8% after its second-quarter earnings came in slightly ahead of forecasts. Sainsbury's moved 4.5% higher after the supermarket group said full-year profit would come in at the upper half of its forecast.

Shell gained 1.9%, after it posted in-line quarterly profit and announced a share buyback programme of $3.5 billion over the next three months.