London midday: Stocks maintain gains as BoE stands pat

London stocks maintained gains just after midday on Thursday after the Bank of England held rates at a 16-year high, as expected.

The FTSE 100 was up 1.2% at 7,830.34, having kicked the session off sharply higher following strong gains on Wall Street, after the Federal Reserve left rates unchanged and chair Jerome Powell struck a dovish note.

The BoE kept interest rates unchanged at 5.25% for the fifth month in a row. This came despite a bigger-than-expected drop in inflation in February.

Figures released on Wednesday by the Office for National Statistics showed the consumer price index declined to 3.4% from 4% in January, versus expectations for a fall to 3.5% and getting a touch closer to the Bank’s 2% target.

This marked the lowest level since September 2021.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The Bank of England is continuing to keep an iron grip on high interest rates, with the monetary policy committee not for turning, despite inflation dropping back more sharply than forecast.

"The majority vote to keep rates on hold has hardly come as a surprise given the MPC’s past reticence towards cutting interest rates. Yet again there was a lone voice on the committee calling for an immediate rate cut, with the vote 8-1 for rates to stay on hold.

"The Bank of England has adopted the same stance as the Fed yesterday and the ECB last week, indicating that inflation is following the right path, but it’s still wary about the potential for prices to bubble up again."

Market participants were also mulling the latest data from the Office for National Statistics, which showed the government borrowed more than expected in February.

Elsewhere, a survey from S&P Global revealed that UK service sector output continued to grow in March, albeit at a slower pace, suggesting the economy has likely moved out of recession.

In equity markets, fashion retailer Next jumped as it held guidance for 2024 after posting a better-than-expected 5% rise in annual profits to £918m.

Savings and investments firm M&G gained as it beat analysts' forecasts with its 2023 results, with net client flows, adjusted profits and operating capital generation all up materially on the previous year.

Direct Line rose as it reported a widening of its full-year losses but announced a new £100m cost-savings plan and reinstated its dividend.

Virgin Money advanced as it formally agreed to be taken over by Nationwide in a £2.9bn deal. The news on Thursday confirmed a preliminary agreement announced on 7 March.

BA and Iberia owner IAG flew higher after an upgrade to ‘outperform’ at RBC Capital Markets, which said it sees upside to consensus expectations in 2024.

On the downside, Schroders, British American Tobacco, Crest Nicholson, Hikma, Pearson and Beazley all fell as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,830.34 1.20%
FTSE 250 (MCX) 19,635.60 0.78%
techMARK (TASX) 4,484.73 0.47%

FTSE 100 - Risers

St James's Place (STJ) 447.70p 7.03%
Next (NXT) 9,002.00p 6.18%
Anglo American (AAL) 1,933.80p 6.17%
Halma (HLMA) 2,341.00p 6.02%
3i Group (III) 2,675.00p 5.94%
Croda International (CRDA) 4,998.00p 5.80%
Melrose Industries (MRO) 655.20p 5.54%
Ocado Group (OCDO) 486.10p 5.42%
Fresnillo (FRES) 465.20p 5.39%
Airtel Africa (AAF) 95.20p 4.96%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,841.00p -3.76%
Reckitt Benckiser Group (RKT) 4,251.00p -2.68%
Smith & Nephew (SN.) 1,030.00p -2.65%
Prudential (PRU) 760.20p -2.61%
British American Tobacco (BATS) 2,349.00p -2.61%
Centrica (CNA) 125.90p -1.83%
Schroders (SDR) 374.30p -1.63%
Burberry Group (BRBY) 1,212.00p -1.46%
Unilever (ULVR) 3,877.50p -1.31%
Beazley (BEZ) 675.50p -1.24%

FTSE 250 - Risers

Close Brothers Group (CBG) 376.60p 8.41%
Hochschild Mining (HOC) 122.50p 8.31%
Mobico Group (MCG) 72.85p 8.25%
Johnson Matthey (JMAT) 1,842.50p 7.91%
TI Fluid Systems (TIFS) 167.20p 6.63%
Marshalls (MSLH) 280.00p 6.46%
Carnival (CCL) 1,204.50p 6.36%
Essentra (ESNT) 175.40p 6.05%
Future (FUTR) 626.50p 5.65%
Investec (INVP) 518.40p 5.58%

FTSE 250 - Fallers

Trustpilot Group (TRST) 190.20p -8.56%
Ferrexpo (FXPO) 43.54p -8.41%
Computacenter (CCC) 2,710.00p -7.89%
Watches of Switzerland Group (WOSG) 345.20p -5.79%
Bytes Technology Group (BYIT) 515.50p -4.18%
Octopus Renewables Infrastructure Trust (ORIT) 73.80p -3.66%
Dr. Martens (DOCS) 86.85p -3.34%
Moonpig Group (MOON) 162.30p -3.16%
Crest Nicholson Holdings (CRST) 197.20p -3.14%
Spire Healthcare Group (SPI) 223.00p -3.04%