London close: Stocks lower as BoE keeps rates on hold
By Josh White
Date: Thursday 19 Jun 2025
(Sharecast News) - London equities ended lower on Thursday after the Bank of England left interest rates unchanged, in line with market expectations.
The FTSE 100 index fell 0.58% to close at 8,791.80 points, while the FTSE 250 declined 1.02% to 21,073.99 points.
Sterling was steady against the dollar, rising 0.05% to last trade at $1.3429, while it gained 0.25% against the euro, changing hands at €1.1720.
"While the US Federal Reserve and Bank of England kept their interest rates unchanged, the Swiss National Bank and Norges Bank lowered their rates by 25 basis points," said IG senior technical analyst Axel Rudolph.
"The Swiss national bank lowered its rates to zero for the first time since negative rates in late 2022 and the Norwegian central bank for the first time in five years amid easing inflationary pressures and a weakening global economic outlook.
"The BoE took a more cautious stance, though, as it expects inflation to remain at current levels for the rest of the year before easing back towards its 2% target next year."
Rudolph said ongoing Israel-Iran missile attacks and the possibility of US involvement had increased worries of possible supply disruptions which pushed oil and gas prices to four-month highs.
"Stock indices dropped while the gold price traded flat as silver and copper prices fell by around a percentage point amid the uncertainty."
Central banks diverge as BoE holds rates amid sticky inflation
At the top of the agenda was the Bank of England, which kept interest rates unchanged at 4.25% on Thursday, as expected, with policymakers divided over the next steps for monetary policy.
The Monetary Policy Committee voted six to three in favour of holding rates steady, with three members backing a 25 basis point cut.
Governor Andrew Bailey and chief economist Huw Pill supported no change, citing persistent inflation, which remains above target at 3.4%.
In minutes accompanying the decision, the Bank noted that inflation is likely to hover around 3.5% in the near term before gradually falling toward the 2% target in 2025.
While acknowledging subdued consumer spending and a softening labour market, the committee argued a cautious approach to rate reductions remains appropriate.
The move echoed the US Federal Reserve's decision a day earlier to also keep rates on hold.
"Policymakers are in a stalemate; growth has seized up, but inflation has stayed stubbornly sticky," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"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."
Despite weak economic growth, consumer sentiment in the UK showed signs of recovery.
According to the British Retail Consortium, confidence in June reached its highest level since last Christmas, though it remains negative by historical standards.
Fewer people expect the economy to worsen in the near term, and sentiment around personal finances and spending has modestly improved.
"Gen Z saw the biggest improvement, in both economic outlook and their expectations of their future finances, with younger generations remaining the most optimistic about the future," said Helen Dickinson, chief executive of the BRC.
"This rising optimism may also reflect the increase in minimum wage from April, with many younger people expected to have seen a significant uplift in their pay packet."
Elsewhere in Europe, construction activity in the eurozone rebounded in April, with output rising 1.7% month-on-month, the fastest pace in over two years.
Strong gains in building and specialised construction helped offset weakness in civil engineering.
On an annual basis, output rose 3%, driven by sharp increases in Spain, Slovenia, and Portugal.
Meanwhile, the Swiss National Bank cut interest rates by 25 basis points to 0%, citing easing inflationary pressures.
The SNB said it remains prepared to act further if needed to maintain price stability.
Norway's central bank also unexpectedly lowered its key rate to 4.25%, marking its first cut since the end of 2023.
Officials pointed to a faster-than-expected decline in inflation and said a gradual rate normalisation would support the economy without excessive tightening.
Hays and Revolution Beauty lead decliners amid corporate newsflow
On London's equity markets, recruitment firm Hays plunged 9.83% after issuing a profit warning.
The company said it now expected full-year operating profit of around £45m, well below analyst expectations of £56.4m, citing a more difficult market for permanent hires.
Sector peer PageGroup also slumped, shedding 8.36%.
Revolution Beauty collapsed 41.48% after Frasers Group withdrew from a potential takeover, just 10 days after expressing interest.
Among building materials firms, Breedon Group dropped 9.3% after RBC Capital Markets cut its price target, citing adverse weather in key markets and broader operational headwinds.
NCC Group and XPS Pensions also declined, down 11.15% and 6.69% respectively, following results.
Houses builder Persimmon fell 3.44%, United Utilities lost 2.35%, and Compass Group was down 1.08%, all trading ex-dividend.
Whitbread dipped 1.15% after reporting a fall in first-quarter sales and warning of a challenging UK market environment.
On the upside, oil giants BP and Shell gained 1.43% and 1.34% respectively, extending recent strength in the energy sector.
Vodafone rose 1.01% following the appointment of Pilar Lopez as incoming chief financial officer, effective 1 October.
Syncona was among the top risers, jumping 4.83% after announcing plans to begin an orderly wind-down of its portfolio, aiming to return value to shareholders while managing its life sciences assets.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,791.80 -0.58%
FTSE 250 (MCX) 21,073.99 -1.02%
techMARK (TASX) 5,022.29 -0.97%
FTSE 100 - Risers
Melrose Industries (MRO) 499.30p 2.69%
BP (BP.) 392.95p 1.67%
Bunzl (BNZL) 2,252.00p 1.35%
Shell (SHEL) 2,698.00p 1.16%
Vodafone Group (VOD) 76.00p 1.01%
BT Group (BT.A) 191.15p 0.95%
Admiral Group (ADM) 3,400.00p 0.83%
Smith & Nephew (SN.) 1,074.00p 0.66%
Smurfit Westrock (DI) (SWR) 3,175.00p 0.63%
Mondi (MNDI) 1,195.50p 0.59%
FTSE 100 - Fallers
CRH (CDI) (CRH) 6,416.00p -3.81%
Persimmon (PSN) 1,320.00p -3.44%
Anglo American (AAL) 2,019.00p -3.40%
Antofagasta (ANTO) 1,700.00p -3.35%
International Consolidated Airlines Group SA (CDI) (IAG) 309.60p -3.10%
easyJet (EZJ) 521.20p -2.98%
Airtel Africa (AAF) 171.60p -2.83%
InterContinental Hotels Group (IHG) 8,088.00p -2.79%
3i Group (III) 4,040.00p -2.44%
Rio Tinto (RIO) 4,137.50p -2.43%
FTSE 250 - Risers
Syncona Limited NPV (SYNC) 93.30p 4.83%
Ithaca Energy (ITH) 177.80p 3.73%
IntegraFin Holding (IHP) 302.50p 2.89%
Harbour Energy (HBR) 210.40p 1.74%
W.A.G Payment Solutions (WPS) 88.00p 1.62%
Senior (SNR) 170.80p 1.30%
Raspberry PI Holdings (RPI) 453.20p 1.25%
B&M European Value Retail S.A. (DI) (BME) 273.00p 1.07%
PayPoint (PAY) 813.00p 0.99%
Pennon Group (PNN) 490.60p 0.99%
FTSE 250 - Fallers
NCC Group (NCC) 147.20p -11.15%
Hays (HAS) 63.30p -9.83%
Breedon Group (BREE) 386.20p -9.30%
Pagegroup (PAGE) 239.00p -8.36%
XPS Pensions Group (XPS) 350.00p -6.78%
Burberry Group (BRBY) 1,006.50p -4.69%
Currys (CURY) 118.50p -4.51%
Fidelity China Special Situations (FCSS) 245.00p -4.48%
Aston Martin Lagonda Global Holdings (AML) 83.40p -3.86%
Carnival (CCL) 1,528.50p -3.75%
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