FTSE 100 Dips Amid Federal Reserve's Projections

The UK's FTSE 100 index fell by 1%, revisiting a near one-month low, due to the U.S. Federal Reserve's recent slower interest-rate cut projections affecting global investor sentiment. The FTSE midcap 250 also declined, while water utility stocks rose amidst broader market pressures.

On Thursday, the UK's primary stock index, the FTSE 100, experienced a 1% dip, revisiting near one-month lows as the U.S. Federal Reserve's projections suggested a slower path for interest-rate cuts. This announcement significantly impacted global investor risk appetite.

As of 0900 GMT, the FTSE 100 reached its lowest point since November 21, paralleling declines in European and Asian markets and following Wall Street's negative trend. The FTSE midcap 250 also saw a 1% drop, underscoring broad market sensitivity to interest rate forecasts.

Amid rising concerns about inflation ahead of Donald Trump's upcoming presidency, the Fed projected two 25-basis-point rate cuts for next year. This stance contributed to a stronger sterling and higher gilt yields, further pressuring UK equities. In contrast, water utility firms witnessed gains due to impending bill increases approved by Ofwat.

(With inputs from agencies.)