London close: Stocks finish lower as BoE holds rates

The FTSE 100 index edged down by 0.05% to close at 8,701.99, while the FTSE 250 decreased by 0.12%, ending at 20,097.98.

In currency markets, sterling was last down 0.32% on the dollar, trading at $1.2962, while it appreciated 0.26% against the euro, changing hands at €1.1957.

“The Federal Reserve might be desperately signalling their worries about the US economy, but traders continue to pile back into US stocks,” said IG chief market analyst Chris Beauchamp.

“It has been a choppy 24 hours for equity markets, especially in the US, which saw futures slumping this morning before a rebound this afternoon.

“For the moment it looks like bargain hunting continues to underpin Wall Street’s rebound, at least in the short-term.”

Beauchamp added that geopolitical tensions continued to be oil’s friend.

“The prospect of an extended US campaign against the Houthis combines with Israel’s renewed Gaza offensive to put oil squarely back in the spotlight.

“After its huge fall from January positioning remains firmly skewed to the upside, and buyers continue to take advantage of headlines to drive gains for the time being.”

BoE keeps rates on hold as unemployment keeps steady

At the top of the economic agenda was the Bank of England, which held its benchmark interest rate steady at 4.5% as widely expected in its final policy decision before next week’s Spring Statement.

The Monetary Policy Committee voted 8-1 to maintain rates, with external member Swati Dhingra again calling for a 25-basis-point cut.

In contrast, February’s decision saw a slightly larger dissent, with a 7-2 vote in favor of maintaining rates.

Policymakers remained focussed on balancing economic weakness with persistent inflationary pressures.

“Given that storms threaten to whip across the global economy, policymakers have opted not to rock the boat,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Like the Federal Reserve, the BoE has opted for a ‘wait and see’ policy, given the uncertainty.

“Stagflation has reared its head and does not look like it’s going to back away soon, which is set to keep decision-making difficult.”

The latest data from the Office for National Statistics highlighted the challenges facing the BoE.

Wage growth remained high at 5.9% in the three months to January, despite minimal job market expansion.

Employment increased by just 0.1% over the year, while the unemployment rate held steady at 4.4%.

Inflation stood at 3% in January, above the central bank’s 2% target, while GDP contracted by 0.1%.

The MPC acknowledged growing global risks, citing trade policy uncertainty and recent US tariff moves.

While rate cuts were still anticipated later this year, most analysts expected the first reduction in May.

Consumer sentiment meanwhile showed a modest recovery in March, according to a British Retail Consortium survey.

The percentage of consumers expecting economic improvement rose to 15% from 13% in February, helping lift the overall sentiment balance to -35 from a record-low -37.

However, half of respondents still expect conditions to deteriorate.

Gen Z consumers were the most optimistic about increasing their spending, while Gen X respondents signalled cutbacks across most categories.

“Consumer confidence stabilised this month after February’s record low,” said Helen Dickinson, chief executive of the BRC.

“This was coupled with an increase in spending expectations for the three months ahead, both for retail spending and spending more generally.

“Within retail, spending expectations for DIY and home improvements moved into positive territory for the first time.”

In European economic developments, eurozone construction activity slowed for a second consecutive month in January, with output rising just 0.2%, down from December’s 0.4% gain.

German producer prices also missed expectations, rising 0.7% year-on-year in February - slightly higher than January’s 0.5% increase but below the 1% forecast.

Month-on-month, prices declined 0.2%.

Across the Atlantic, US housing market data showed signs of resilience.

Existing home sales rose 4.2% in February to an annualized rate of 4.26 million, reversing January’s 4.7% drop.

Analysts had anticipated a further decline, but the data suggested improved market conditions.

Meanwhile, manufacturing activity in Philadelphia grew at a slower pace in March.

The Philly Fed index fell to 12.5 from February’s 18, though it remained ahead of expectations.

Input prices rose to their highest level in nearly three years, adding to concerns over inflationary pressures.

Crest Nicholson surges, Compass drops on competitor’s woes

On London’s equity markets, Crest Nicholson surged 6.96% after stating it remained on track to meet full-year guidance, signaling confidence in the housing market despite broader economic uncertainties.

Shaftesbury Capital also gained 6.05% following news that it had sold a 25% stake in its Covent Garden portfolio to Norges Bank Investment Management for £570m.

The deal valued the estate at £2.7bn, aligning with prior valuations.

Great Portland Estates added 4.44%, while Bloomsbury Publishing climbed 3.45% after reporting that full-year trading was ahead of expectations due to a strong second-half performance.

Food producer Cranswick gained 1.51% as it reaffirmed its outlook and upgraded medium-term targets, citing continued demand for pork and poultry products.

Insurer Prudential advanced 1.61% after announcing a 13% dividend hike and an accelerated $2bn share buyback plan.

The firm posted a 10% rise in adjusted operating profit to $3.13bn for 2024.

Wealth manager Rathbones Group rose 1.23% after appointing Jonathan Sorrell as its chief executive designate.

Energean ended slightly higher, up 0.12%, despite posting a $241m impairment charge that weighed on profit growth.

On the downside, 3i Group dropped 3.3% following an update on its portfolio company, discount retailer Action.

Investec fell 4.68% after its profit guidance of a 5% to 12% rise for the year ending 31 March failed to impress investors.

Compass Group declined 3.68% after its competitor Sodexo cut its full-year revenue guidance, citing weaker-than-expected growth in North America.

Pearson and Beazley fell 5.71% and 3.62%, respectively, as they traded without entitlement to their latest dividend payments.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,701.99 -0.05%
FTSE 250 (MCX) 20,097.98 -0.12%
techMARK (TASX) 4,763.31 -0.09%

FTSE 100 - Risers

SSE (SSE) 1,568.50p 3.09%
Prudential (PRU) 796.80p 2.92%
Pershing Square Holdings Ltd NPV (PSH) 3,796.00p 2.87%
Experian (EXPN) 3,616.00p 2.76%
London Stock Exchange Group (LSEG) 11,260.00p 2.74%
Flutter Entertainment (DI) (FLTR) 18,790.00p 2.37%
Diploma (DPLM) 4,050.00p 2.22%
BT Group (BT.A) 163.20p 2.06%
National Grid (NG.) 993.80p 2.05%
Diageo (DGE) 2,076.50p 2.01%

FTSE 100 - Fallers

Pearson (PSON) 1,197.50p -5.71%
M&G (MNG) 217.00p -3.81%
Compass Group (CPG) 2,408.00p -3.68%
Beazley (BEZ) 865.50p -3.62%
3i Group (III) 3,689.00p -3.30%
Hikma Pharmaceuticals (HIK) 2,022.00p -2.79%
International Consolidated Airlines Group SA (CDI) (IAG) 290.60p -2.22%
HSBC Holdings (HSBA) 876.10p -2.21%
Standard Chartered (STAN) 1,169.00p -2.13%
Rolls-Royce Holdings (RR.) 796.60p -1.99%

FTSE 250 - Risers

Crest Nicholson Holdings (CRST) 162.80p 6.96%
Diversified Energy Company (DEC) 1,058.00p 6.22%
Shaftesbury Capital (SHC) 125.30p 5.85%
Great Portland Estates (GPE) 306.00p 4.44%
Trainline (TRN) 284.80p 3.56%
Bloomsbury Publishing (BMY) 600.00p 3.45%
Just Group (JUST) 150.20p 3.02%
PayPoint (PAY) 636.00p 2.58%
Alpha Group International (ALPH) 2,480.00p 2.48%
Bridgepoint Group (Reg S) (BPT) 338.40p 2.42%

FTSE 250 - Fallers

Ferrexpo (FXPO) 71.10p -7.66%
Investec (INVP) 488.40p -5.44%
Softcat (SCT) 1,673.00p -3.24%
SSP Group (SSPG) 155.20p -3.07%
Kainos Group (KNOS) 721.00p -2.85%
Raspberry PI Holdings (RPI) 559.00p -2.78%
Babcock International Group (BAB) 735.50p -2.65%
Fidelity China Special Situations (FCSS) 281.00p -2.60%
4Imprint Group (FOUR) 3,820.00p -2.55%
Genuit Group (GEN) 377.00p -2.46%