Finance
UK stocks dip ahead of Fed, BoE rate decisions
Published by Global Banking and Finance Review
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
UK stocks fell as investors await Fed and BoE rate decisions. FTSE 100 dipped 0.2%, with housing stocks hit hard. Fed likely to cut rates by 25 bps.
Dec 8 (Reuters) - The main UK stock indexes slipped on Monday as investors geared up for interest rate decisions from the U.S. Federal Reserve and the Bank of England.
The blue-chip FTSE 100 closed the session down 0.2%, having traded in a tight range over the past few days. The FTSE 250 index dipped 0.7%.
British housing stocks were among the worst hit on the day, driving their own FTSE 350 index more than 3% lower. Shares of Barratt Redrow fell 2% after Citigroup cut the housebuilder's target price to 506 pence from 530 pence.
Unilever dipped 2% after Magnum Ice Cream Company kicked off Amsterdam trading as it finalised a long-awaited spinoff from the global packaged goods maker.
Global investors are awaiting the U.S. central bank's monetary policy decision on Wednesday, at a time when policymakers remain divided on whether further rate cuts are needed to help the job market or too risky due to elevated inflation.
Traders are pricing in a 90% chance of a 25-bps rate cut this week, according to CME Group's Fedwatch tool, with the odds of such a move recently boosted by mixed U.S. economic data and comments from Fed officials.
Meanwhile, an industry report showed Britain's jobs market remained weak last month in the run-up to finance minister Rachel Reeves' budget on November 26 as employers worried about possible new tax increases.
The boss of the UK arm of German discounter Aldi said Britons feeling the pinch are spreading the cost of Christmas by shopping earlier and swapping festive meals out for dining in.
The BoE is widely expected to reduce borrowing costs by 25 basis points to 3.75% next week, after keeping them on hold in November.
Shares in investment firm SDCL Efficiency Income Trust slumped 16.2% as a key metric - the ratio of debt to equity - stood at 71.9% of NAV, breaching the investment policy limit at 65%.
(Reporting by Sruthi Shankar and Tharuniyaa Lakshmi in Bengaluru; Editing by Leroy Leo and Andrew Heavens)
The Federal Reserve, often referred to as the Fed, is the central bank of the United States responsible for implementing monetary policy, regulating banks, and maintaining financial stability.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, setting monetary policy, and ensuring financial stability in the UK economy.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by central bank policies and economic conditions.
Inflation is the rate at which the general level of prices for goods and services rises, leading to a decrease in purchasing power. It is often measured by the Consumer Price Index (CPI).
The FTSE 100 Index is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization.
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