London midday: FTSE little changed as BoE stands pat on rates

(Sharecast News) - London stocks were little changed by midday on Thursday after the Bank of England stood pat on interest rates, as widely expected, and as investors waded through a deluge of corporate updates.

The FTSE 100 was down just 0.1% at 9,770.86, while sterling was 0.2% firmer against the dollar at 1.3072 after the BoE voted by a majority of five to four to leave the cost of borrowing at 4% in its final meeting ahead of the Budget.

The four members voted to reduce Bank Rate by 25 basis points, to 3.75%

Although economic growth remains sluggish, the BoE is also battling persistently sticky inflation.

The consumer price index currently stands at 3.8%, off recent highs but still well above the Bank's long-term target of 2%.

Daniel Austin, chief executive and co-founder at ASK Partners, said: "With global volatility high and domestic policy in flux, it's little surprise the MPC has held rates at 4%. With the Autumn Statement approaching and fiscal plans still unclear, policymakers are waiting for greater certainty.

"For homeowners and buyers, hopes of cheaper borrowing persist, but high fixed-rate mortgages mean meaningful relief remains distant. Inflation is unlikely to hit target this year, keeping mortgage pressures elevated and household confidence weak."

In equity markets, bank stocks gained on reports that chancellor Rachel Reeves was minded to rule out increasing taxes on the sector in her upcoming Budget. NatWest, Lloyds and Barclays were all up.

IMI shot to the top of the FTSE 100 as it hailed an "excellent" third-quarter performance and said it was on track deliver its fourth consecutive year of mid-single digit organic revenue growth.

Sainsbury's gained as it lifted full-year profit guidance and increased shareholder payouts after interim earnings and sales beat expectations.

BT Group was also up after half-year results, while infrastructure firm Helios Towers surged as it tightened its full-year guidance upwards and announced the next phase of its strategy, which includes the launch of a $75m share buyback.

Watches of Switzerland rallied as it posted a jump in first-half revenue, hailing a particularly strong performance in the US.

Tate & Lyle also racked up solid gains on the back of results.

On the downside, Smith & Nephew fell sharply after third-quarter underlying revenues missed expectations.

Hikma Pharmaceuticals tumbled as it downgraded medium-term guidance for its injectables unit.

Diageo slumped as the drinks maker cut its full-year sales and profit forecast amid weakness in Chinese white spirts and a slowdown in demand in North America.

Ashmore tumbled as it traded without entitlement to the dividend.

Howden Joinery was down even as the trade kitchen supplier said it was on track to meet full-year profit expectations as it reported a rise in first-half sales despite a challenging market.

Hiscox retreated even as it said group insurance contract written premiums rose 5.9% in the first nine months of the year.