FTSE 100 marginally up as BoE rate decision in focuswritten by Bella Palmer
The central bank is anticipated to announce a 25bps rate hike, taking borrowing costs to their highest level since 2008 as it battles double digit inflation
UK's blue-chip FTSE 100 index increased marginally on Thursday, helped by gains in shares of export-oriented companies as the pound dropped ahead of the Bank of England's (BoE) monetary policy decision.
The central bank is anticipated to announce a 25bps rate hike, taking borrowing costs to their highest level since 2008 as it battles double digit inflation.
After the announcement, market participants will keenly evaluate comments by Governor Andrew Bailey for indications on inflation outlook and resulting monetary tightening.
The Bank of England has been the most moderate central bank so far (with rate hikes), according to Capital.com senior market analyst Daniela Hathorn.
Investors are somewhat concerned that the central bank is not going to do enough, which is why the pound is a bit lower, Hathorn said.
The blue-chip FTSE 100 increased 0.3 per cent as healthcare stocks and consumer staples companies including Unilever Plc soared after the pound declined 0.4 per cent. The pound had reached a five-month high on Wednesday.
The FTSE large-cap and mid-cap indexes have tumbled in May after a bounce back in April, as uncertainty around the interest rate outlook and mixed corporate earnings dented investor sentiment.
The more domestically-focussed mid-cap FTSE 250 rose 0.1 per cent by 0836 GMT.
ITV Plc dropped 5.3 per cent to reach more than a four-month low, after the broadcaster reported a 10 per cent decline in its total advertising revenue in Q1 of 2023.
FirstGroup Plc dived 5.4 per cent, its biggest decline in eight months after the British government took temporary control of the transport company's TransPennine Express.
Among other decliners were HSBC Holdings Plc, BP Plc, Petershill Partners Plc and Tesco Plc, shedding between 0.3 per cent and 6 per cent as the stocks traded ex-dividend.
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