London stocks were still little changed by midday on Thursday after the Bank of England raised interest rates, as expected.
The FTSE 100 was down 0.1% at 7,578.41, while sterling rose 0.3% against the dollar to 1.3612, having been 0.2% lower before the BoE announcement.
The Bank lifted interest rates to 0.5%. The widely-expected 0.25 percentage point hike follows December’s decision to increase rates to 0.25% from a record low of 0.1%. It is the first time since 2004 that the central bank has opted to lift interest rates at two consecutive Monetary Policy Committee meetings.
The MPC voted for the rise by a majority of 5-4.
The BoE is trying to tackle growing price pressures which have seen inflation hit a near-30-year of 5.4%, well above its 2% target, while ensuring the economy continues to grow post pandemic.
Victoria Scholar, head of investment at Interactive Investor, said: “Amid the backdrop of heightened inflation, the central bank has no choice but to tighten monetary policy in an attempt to curb rising price levels. The MPC has a difficult balance to strike, curtailing price pressures without inducing an economic recession.
“While higher interest rates will take some of the heat out of the economy, it will do little to curb the major supply side pressures, which look set to push inflation to 6%, namely the surge in energy prices, supply chain bottlenecks and labour shortages.”
In equity markets, Compass rallied to the top of the FTSE 100 after the catering group reported a 39% increase in first-quarter revenue and said revenues had reached 97% of their pre-Covid level.
Shell gushed higher after the oil giant posted better-than-expected fourth-quarter profits, driven by surging oil and gas prices and announced an $8.5bn share buyback.
Playtech surged as a fresh potential bid for the gambling software maker emerged, hours after a £2.7bn offer from Australia’s Aristocrat Leisure collapsed. TT Bond Partners, which advised on an earlier bid for Playtech from Gopher Investments, has been given consent by Playtech to release it from restrictions that would stop it from tabling a further offer.
Renishaw was also on the rise after it posted a jump in interim profit and revenue and said it had seen a “record” level of demand as key market sectors recover.
Cranswick was up after it backed its full-year expectations following a solid performance over the festive period.
On the downside, BT slid after it said it was in talks with Discovery Inc about forming a sports joint venture as the company reported a 3% drop in profit for the first nine months of the year.
Media group Future lost ground even as it backed its full-year expectations and said trading in the four months to the end of January had been in line with expectations.
Outsourcer Bunzl was under the cosh after a downgrade to ‘sell’ at Goldman Sachs.
Market Movers
FTSE 100 (UKX) 7,578.41 -0.06%
FTSE 250 (MCX) 22,133.83 -0.52%
techMARK (TASX) 4,434.50 -0.62%
FTSE 100 – Risers
Compass Group (CPG) 1,791.00p 8.32%
BP (BP.) 393.10p 0.91%
British American Tobacco (BATS) 3,195.00p 0.85%
London Stock Exchange Group (LSEG) 7,306.00p 0.74%
Rio Tinto (RIO) 5,393.00p 0.71%
Aviva (AV.) 440.50p 0.71%
Glencore (GLEN) 402.10p 0.70%
Imperial Brands (IMB) 1,733.50p 0.67%
BAE Systems (BA.) 576.00p 0.66%
Unilever (ULVR) 3,804.50p 0.58%
FTSE 100 – Fallers
BT Group (BT.A) 186.30p -4.71%
Scottish Mortgage Inv Trust (SMT) 1,073.00p -2.94%
Bunzl (BNZL) 2,732.00p -2.91%
Ashtead Group (AHT) 5,236.00p -2.86%
Croda International (CRDA) 7,980.00p -2.64%
Rightmove (RMV) 650.80p -2.49%
Aveva Group (AVV) 2,907.00p -2.38%
Halma (HLMA) 2,483.00p -2.13%
Spirax-Sarco Engineering (SPX) 13,285.00p -1.96%
Polymetal International (POLY) 1,055.50p -1.95%
FTSE 250 – Risers
Playtech (PTEC) 650.50p 11.20%
Renishaw (RSW) 4,890.00p 6.49%
Wizz Air Holdings (WIZZ) 4,327.00p 2.08%
Cranswick (CWK) 3,792.00p 1.94%
Euromoney Institutional Investor (ERM) 929.00p 1.86%
Capital & Counties Properties (CAPC) 171.90p 1.72%
TBC Bank Group (TBCG) 1,490.00p 1.64%
Helios Towers (HTWS) 160.20p 1.52%
Contour Global (GLO) 187.60p 1.41%
Trainline (TRN) 232.60p 1.39%
FTSE 250 – Fallers
Future (FUTR) 3,136.00p -7.98%
Auction Technology Group (ATG) 1,050.00p -4.72%
Oxford Biomedica (OXB) 833.00p -4.03%
GCP Infrastructure Investments Ltd (GCP) 102.80p -3.93%
Trustpilot Group (TRST) 170.50p -3.89%
Baillie Gifford US Growth Trust (USA) 224.50p -3.65%
Aston Martin Lagonda Global Holdings (AML) 1,150.00p -3.52%
Reach (RCH) 256.00p -3.40%
Chrysalis Investments Limited NPV (CHRY) 190.00p -3.31%
Indivior (INDV) 218.20p -3.02%
