UK Markets Rally Ahead of BoE's Rate Decision

UK shares advanced, with blue-chip lenders boosting the FTSE 100 ahead of a Bank of England rate decision. Amid global economic concerns, the BoE and Federal Reserve decisions take center stage. Notable stock movements included Bytes Technology's rise after strong profits, and Close Brothers' losses due to legal cost adjustments.

UK shares saw an uptick on Tuesday, with the FTSE 100 advancing for the fourth consecutive day, led by gains in banking stocks. This bullish trend comes as investors anticipate a crucial decision from the Bank of England (BoE) on interest rates later this week.

Prominent lenders like HSBC, Barclays, NatWest, and Lloyds contributed significantly to the index's rise, registering gains between 1% and 2.2%. Meanwhile, the FTSE 250 mid-cap also experienced a boost, climbing 0.8% to reach a one-week high, even as a stronger sterling capped some international firms' gains.

With central bank meetings under the spotlight, the focus shifts to the Federal Reserve's policy decision on Wednesday. Market participants look for potential indications of interest rate cuts to sustain growth, as both the BoE and Fed are likely to leave rates unchanged this week. However, the possibility of at least two rate cuts by each bank remains on the table.

(With inputs from agencies.)