UK Stocks Climb as Bank of England Maintains Rates, Extends Bond Reduction
The UK's benchmark stock indexes increased on Thursday after the Bank of England (BoE) decided to keep interest rates steady at 5%, aligning with expectations. The BoE also extended its bond reduction plan for another year. The blue-chip FTSE 100 rose by 0.9%, with mid-caps gaining 1.6%.
The UK's benchmark stock indexes closed higher on Thursday following the Bank of England's (BoE) decision to keep interest rates unchanged at 5%, as anticipated. The central bank also extended its bond reduction plan for another year.
The blue-chip FTSE 100 increased by 0.9%, while mid-caps rose by 1.6%. Both indexes reached their highest levels in over two weeks. BoE policymakers, voting 8-1, opted to maintain the benchmark rate. Governor Andrew Bailey mentioned that falling inflation pressures could allow the BoE to reduce interest rates gradually in the coming months.
'The Committee stressed a relatively patient approach towards further normalization, which remains warranted given the relatively persistent nature of underlying price pressures within the UK economy,' noted Michael Brown, senior research strategist at Pepperstone. Additionally, they voted to decrease the bank's stock of British government bonds by another 100 billion pounds this year.
(With inputs from agencies.)
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