(Sharecast News) - London stocks ended up on Thursday, with WPP and Shell both higher after updates, as investors mulled the European Central Bank's decision to leave rates on hold, as expected, and indications that a hike was coming in December.
The FTSE 100 closed 0.3% higher at 10,722.07.
The ECB, which has lifted rates twice since June, left the deposit rate at 2.50%, while the interest rates on the main refinancing operations and the marginal lending facility were held at 2.65% and 2.90%, respectively.
It said: "Energy prices have continued to rise, posing upside risks to the inflation outlook and downside risks to the growth outlook. While the full effects of the energy shock are still unfolding, underlying inflation has remained broadly stable so far and wages do not show a material response at this stage. The increased magnitude and duration of the energy shock, as well as the implications for indirect and second-round effects, are likely to drive up inflation and lower growth. Financing conditions have tightened since the Governing Council's last meeting, which is likely to weigh on inflation and growth.
"The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term."
Danske Bank said the ECB's mixed messaging suggests that a December hike is likely, and likely the last.
The interest rate announcement came just hours after the ECB said that president Christine Lagarde plans to step down on 7 February 2027, before the end of her term. Lagarde had been due to step down next October.
On home shores, figures from the Bank of England showed that mortgage approvals fell a little more than expected in September.
The latest monthly Money and Credit report showed that net mortgage approvals for house purchases declined to 53,400 from 54,800 in August. Economists were expecting a slightly smaller drop to 54,000.
Net borrowing of mortgage debt by individuals fell to £3.9bn in September from £4.2bn a month earlier, below the previous six-month average of £4.9bn.
The 'effective' interest rate - the actual interest paid - on newly-drawn mortgages rose to 4.63% from 4.60% Meanwhile, the rate on the outstanding stock of mortgages ticked up to 4.03% in September from 4.00% in August.
The report also showed that net borrowing of consumer credit by individuals fell to £1.9bn from £2.7bn in August. Within this, net borrowing through credit cards was £0.7bn in September, down from £1.3bn in August. Borrowing through other forms of consumer credit, such as car dealership finance and personal loans, declined to £1.2bn from £1.4bn.
In equity markets, advertising firm WPP surged as it reiterated its full-year guidance and posted an uptick in third-quarter revenues.
Shell gained as it posted a near-doubling of its third-quarter profit, driven by record refining margins, and announced a $5bn share buyback programme.
Whitbread rallied as the Premier Inn owner welcomed Chencellor John Healey's Budget, saying that the freeze to business rates and a "more reasonable" increase in wages were set to have "a significant positive impact" on its performance.
Aviva was higher after an upgrade to 'overweight' from 'equalweight' at Morgan Stanley, which increased its price target to 820p from 700p.
On the downside, Haleon tumbled as the consumer healthcare firm cut its full-year organic revenue growth guidance, pointing to soft cold and flu sales in the third quarter.
St James's Place also lost ground despite saying that funds under management reached a record £242.4bn in the third quarter after another quarter of net inflows.
Lloyds Banking Group was under the cosh despite saying it was on track to meet 2026 guidance as it posted a rise in third-quarter pre-tax profit and net income that met analysts' expectations. Neil Wilson, UK investor strategist at Saxo Markets, said the reaction to the results "implies investors are worried about the tax increases in the Budget and requiring a higher bar for earnings".
Mecca Bingo and Grosvenor Casino owner Rank Group fell as it said the rise in machine games duty announced in Wednesday's Budget will add around £9m in costs per year before mitigating actions.
Market Movers
FTSE 100 (UKX) 10,722.07 0.26%
FTSE 250 (MCX) 24,674.16 0.14%
techMARK (TASX) 6,255.14 -1.15%
FTSE 100 - Risers
WPP (WPP) 404.90p 5.39%
3i Group (III) 2,432.00p 3.53%
BAE Systems (BA.) 2,070.00p 2.81%
London Stock Exchange Group (LSEG) 9,444.00p 2.81%
ICG (ICG) 1,851.00p 2.61%
Melrose Industries (MRO) 475.00p 2.57%
AstraZeneca (AZN) 13,052.00p 2.26%
Shell (SHEL) 4,038.00p 2.06%
Babcock International Group (BAB) 1,026.50p 1.83%
Rolls-Royce Holdings (RR.) 1,280.00p 1.76%
FTSE 100 - Fallers
Haleon (HLN) 317.70p -15.05%
Lloyds Banking Group (LLOY) 98.66p -5.04%
St James's Place (STJ) 1,072.50p -3.68%
Rio Tinto (RIO) 6,206.00p -2.93%
Metlen Energy & Metals (MTLN) 48.46p -1.98%
Diageo (DGE) 1,701.50p -1.96%
NATWEST GROUP (NWG) 635.20p -1.79%
Glencore (GLEN) 533.80p -1.48%
Coca-Cola Europacific Partners (DI) (CCEP) 8,240.00p -1.26%
Coca-Cola HBC AG (CDI) (CCH) 4,632.00p -1.11%
FTSE 250 - Risers
Bridgepoint Group (Reg S) (BPT) 415.00p 4.64%
RHI Magnesita N.V. (DI) (RHIM) 2,760.00p 3.95%
Rosebank Industries NPV (ROSE) 322.00p 3.30%
Avon Technologies (AVON) 2,505.00p 3.30%
Hansa Investment Company Limited (DI) (HAN) 344.00p 2.99%
Amaroq Ltd. Npv (DI) (AMRQ) 103.00p 2.93%
THG (THG) 41.26p 2.79%
Seraphim Space Investment Trust (SSIT) 187.00p 2.63%
Shawbrook Group (SHAW) 300.00p 2.38%
Morgan Advanced Materials (MGAM) 265.00p 2.32%
FTSE 250 - Fallers
Rightmove (RMV) 512.00p -4.01%
Henderson Far East Income Ltd. (HFEL) 253.00p -3.98%
W.A.G Payment Solutions (EWG) 103.00p -3.92%
Allianz Technology Trust (ATT) 696.00p -3.20%
NCC Group (NCC) 168.60p -2.88%
Schroder Asian Total Return Investment Company (ATR) 648.00p -2.56%
Vietnam Enterprise Investments (DI) (VEIL) 720.00p -1.91%
Kainos Group (KNOS) 1,287.00p -1.91%
Schroder Asia Pacific Fund (SDP) 774.00p -1.78%
Templeton Emerging Markets Inv Trust (TEM) 307.50p -1.76%
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