The FTSE 100 reached a three-month high at the start of trading as the Bank of England prepared to announce its rate decision at noon. The central bank is widely expected to raise Bank Rate to 4% from 3.75%.
The blue-chip FTSE 100 jumped by 119 points to 10,948 points at the open, a three-month high. Global stock markets continue to welcome the strong win by the US Democrats in the midterm elections, according to The Guardian.
Wednesday's session added 190 points, which puts it close to the record high hit at the end of July. It has gained around 10% this year, after hitting 10,000 points for the first time in January.
Bank of England set to hike for the first time since August 2023
The BoE is widely expected to announce its first increase in more than three years at noon. Money markets see a 98% chance of a UK rate rise today.
PIMCO economist Peder Beck-Friis says a hike to 4% is "fully priced by markets". Berenberg expects an 8-1 vote in favour, with only Alan Taylor dissenting, while Deutsche Bank predicts a 6-3 split.
With inflation rising faster than the Bank's target, most policymakers are expected to decide that now is the moment to tighten. Markets are also pricing in up to three rate rises next year, on top of today's.
Oil, gas and gilts ease ahead of the decision
Brent crude fell through $100 a barrel on Wednesday, its lowest level in two months, and traded around $95 on Thursday morning.
The month-ahead UK gas price fell 2% to 214.2p a therm, its fourth daily fall in a row. Yields on UK 10-year gilts dropped 4 basis points to the lowest since August 28, below 5.1%.
Next reported an 8.1% rise in full-price sales in the third quarter, beating City expectations.
Source: The Guardian
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