London midday: Stocks stay down as BoE stands pat, as expected
By Michele Maatouk
Date: Thursday 19 Jun 2025
(Sharecast News) - London stocks were still in the red just after midday on Thursday as the Bank of England stood pat on rates, as widely expected.
The FTSE 100 was down 0.3% at 8,815.13, while sterling was 0.1% firmer against the dollar at 1.3439.
The BoE's rate-setting Monetary Policy Committee voted by a majority of six to three to leave the cost of borrowing unchanged at 4.25%.
External members Swati Dhingra and Alan Taylor, and deputy governor Dave Ramsden voted for a 25 basis point cut, to 4%. Governor Andrew Bailey and chief economist Huw Pill favoured no change.
In the minutes published alongside the decision, the MPC noted that inflation was likely to stay around 3.5% before falling back towards target from next year.
It concluded: "Given the outlook, and continued disinflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remained appropriate."
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Policymakers are in a stalemate. Growth has seized up, but inflation has stayed stubbornly sticky. Trade deals have cleared some economic clouds, but conflict in the Middle East threatens further turmoil. Energy prices looked like they were on their way down, but are now ramping back up. The labour market has shown signs of easing but not enough to erase worries about hot wage growth.
"In every direction, there's a conundrum to confront, so policymakers have judged that pressing the pause button on rates is the best option for now. Given the unpredictable winds whistling through the world, global growth is set to slow, keeping activity in the UK highly sluggish. The economy will need a shove to get moving again, and so two interest rate cuts are still on the horizon this year. Hopes for a summer rate reduction haven't completely faded, with bets ramping up that a cut in August could provide the rays of relief that borrowers have been waiting for."
Earlier, Norway''s central bank unexpectedly cut its policy rate to 4.25% from 4.5%, where it has stood since December 2023. Analysts were expecting rates to be left on hold.
Meanwhile, the Swiss National Bank cut interest rates by 25 basis points to zero, saying it was "countering the lower inflationary pressure".
On Wednesday, the US Federal Reserve kept the benchmark rate unchanged at 4.25% to 4.50% for the fourth consecutive meeting and signalled two cuts by the end of the year. The Fed also downgraded its growth forecasts for the next two years.
More broadly, worries about the Israel-Iran conflict continued to dent sentiment
Neil Wilson, UK investor strategist at Saxo Markets, said: "Geopolitics is still front and centre for markets even as we are in the midst of a busy central bank week. The Israel-Iran conflict is now being viewed by investors through the lens of whether the US gets involved or not.
"President Trump says that he 'may or may not' strike Iran, but the mood music seems to be martial in its drumbeat."
In equity markets, United Utilities, Persimmon and Compass all fell as they traded without entitlement to the dividend.
Whitbread was also weaker as the Premier Inn owner reported a drop in first-quarter sales and pointed to a "challenging" market backdrop in the UK.
Recruiter Hays tumbled as it warned on full-year profits, citing "more challenging" permanent markets. In a pre-close year-end trading update, the company said it now expects FY25 pre-exceptional operating profit of around £45m.
This is below company compiled consensus for £56.4m, based on ten analysts. Pagegroup was also sharply lower.
Outside the FTSE 350, Revolution Beauty tanked as Mike Ashley's Frasers Group walked away from the bidding process for the company, just 10 days after confirming its interest.
On the upside, oil majors BP and Shell gushed higher again.
Market Movers
FTSE 100 (UKX) 8,815.13 -0.32%
FTSE 250 (MCX) 21,136.63 -0.72%
techMARK (TASX) 5,028.35 -0.85%
FTSE 100 - Risers
Melrose Industries (MRO) 502.00p 3.25%
BP (BP.) 391.20p 1.22%
Pearson (PSON) 1,084.00p 1.17%
Vodafone Group (VOD) 76.02p 1.04%
Sainsbury (J) (SBRY) 289.60p 0.91%
Mondi (MNDI) 1,198.50p 0.84%
Bunzl (BNZL) 2,238.00p 0.72%
BT Group (BT.A) 190.70p 0.71%
Shell (SHEL) 2,686.00p 0.71%
Centrica (CNA) 167.35p 0.60%
FTSE 100 - Fallers
United Utilities Group (UU.) 1,136.50p -2.95%
Persimmon (PSN) 1,327.00p -2.93%
Antofagasta (ANTO) 1,720.00p -2.22%
Airtel Africa (AAF) 172.70p -2.21%
3i Group (III) 4,054.00p -2.10%
CRH (CDI) (CRH) 6,532.00p -2.07%
Anglo American (AAL) 2,048.00p -2.01%
Glencore (GLEN) 284.25p -1.73%
Rio Tinto (RIO) 4,168.50p -1.70%
InterContinental Hotels Group (IHG) 8,180.00p -1.68%
FTSE 250 - Risers
Syncona Limited NPV (SYNC) 94.00p 5.62%
Ferrexpo (FXPO) 48.55p 2.86%
Energean (ENOG) 891.00p 1.60%
Diversified Energy Company (DEC) 1,116.00p 1.27%
Elementis (ELM) 154.40p 1.05%
Ithaca Energy (ITH) 173.10p 0.99%
Frasers Group (FRAS) 689.50p 0.95%
B&M European Value Retail S.A. (DI) (BME) 272.40p 0.85%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 416.50p 0.85%
Pacific Horizon Inv Trust (PHI) 604.00p 0.83%
FTSE 250 - Fallers
Hays (HAS) 61.70p -12.11%
NCC Group (NCC) 148.40p -10.06%
Pagegroup (PAGE) 237.80p -8.82%
Breedon Group (BREE) 389.80p -8.45%
Fidelity China Special Situations (FCSS) 245.00p -4.48%
Aston Martin Lagonda Global Holdings (AML) 82.95p -4.38%
Burberry Group (BRBY) 1,013.00p -4.07%
Hochschild Mining (HOC) 236.40p -3.59%
Watches of Switzerland Group (WOSG) 404.80p -3.48%
British Land Company (BLND) 380.00p -3.41%
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