Finance
British stocks rise after BoE rate cut, softer US inflation data
Published by Global Banking & Finance Review®
Posted on December 18, 2025
2 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 18, 2025
2 min readLast updated: January 20, 2026
London stocks rose as BoE cut rates and US inflation data softened, boosting FTSE 100 and FTSE 250 indices.
By Tharuniyaa .
Dec 18 (Reuters) - London stocks rose on Thursday, lifted by the Bank of England's widely-anticipated interest rate cut and a lower-than-expected reading of U.S. inflation that bolstered the chances of further easing from the Federal Reserve.
The UK's blue-chip FTSE 100 closed up 0.65% at its highest in over a month. The domestically focussed midcap FTSE 250 index rose 0.76%.
With a broad-based rally underway, the pan-European benchmark index added 0.9%.
The European Central Bank held rates and revised upward some of its growth and inflation forecasts, while the BoE cut its rate by 25 basis points to 3.75% with Governor Andrew Bailey saying that further reductions would be "a closer call".
Sterling firmed against the dollar, while gilt yields rose after the decision, reflecting markets' mixed view on how quickly borrowing costs will fall.
"One more cut could be on the cards, but given the tight vote, unless inflation keeps falling early next year, we might not see it. The BoE is clearly cautious," said Axel Rudolph, senior technical analyst at IG Group.
Aerospace and defence stocks led the way higher with a 1.8% gain, rallying alongside shares of their European peers. Rolls-Royce jumped 3.8%, while Melrose Industries and Babcock International Group rose 2.6% and 1.4% respectively.
Precious metals and mining stocks added 2.8%. Retailers advanced 1.4%, powered by 7.5% jump in Currys after the British electricals retailer reported that its first-half profit more than doubled.
The FTSE 100 is on track for its best year since 2009 with a 20% year-to-date climb, defying concerns about a sluggish domestic economy and fragile government finances.
Wall Street's benchmark S&P 500 index has risen 16% so far.
Among individual stocks, Premier Inn owner Whitbread rose 6.3% - the top individual performer on the blue chip index - after Corvex disclosed a stake and urged a strategic review.
(Reporting by Tharuniyaa Lakshmi and Nikhil Sharma in Bengaluru; Editing by Sonia Cheema, Kirsten Donovan)
An interest rate is the amount charged by lenders to borrowers for the use of money, typically expressed as a percentage of the principal amount.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, maintaining monetary stability, and overseeing the financial system.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, reflecting the performance of the UK stock market.
Explore more articles in the Finance category
