Market Movements: Britain's Index Struggles Amid Wage Growth Concerns

Britain's primary stock index remained stable, while mid-cap stocks fell as increased wage growth led investors to reassess interest rate cut predictions. The BoE maintains caution, despite the weak economy, cutting rates slightly. Notable movers included banks with gains, while luxury and utility stocks declined.

On Tuesday, Britain's benchmark index saw little movement as the mid-cap index declined after new data indicated an uptick in wage growth, prompting investors to adjust their forecasts for future rate cuts.

The FTSE 100 stood at 8,777.16 points by 1030 GMT, while the FTSE 250 dropped by 0.4%. Wage growth in the final quarter of 2024 has been a significant factor in the Bank of England's cautious approach to adjusting interest rates despite a languishing economy.

Earlier this month, the BoE reduced its benchmark interest rate from 4.75% to 4.5%, with traders anticipating just two more cuts in 2025. Banks led the day's gains, increasing over 1%, while aerospace and defense shares climbed driven by European defense spending calls. Conversely, luxury and utility stocks experienced declines.

(With inputs from agencies.)