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UK’s FTSE slides to 1-mo low as Fed dampens mood ahead of BoE
Published by Jessica Weisman-Pitts
Posted on December 19, 2024
2 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on December 19, 2024
2 min readLast updated: January 28, 2026
(Reuters) – UK’s main FTSE 100 stock index dropped 1% and revisited its near one-month low on Thursday, as the U.S. Federal Reserve’s overnight projection of a slower path of interest-rate cuts knocked down investors’ risk appetite globally.
(Reuters) – UK’s main FTSE 100 stock index dropped 1% and revisited its near one-month low on Thursday, as the U.S. Federal Reserve’s overnight projection of a slower path of interest-rate cuts knocked down investors’ risk appetite globally.
The FTSE 100 was down 1% as of 0900 GMT, hitting its lowest since Nov. 21, levels touched just two days back, echoing the rout across European and Asian stocks on the day and Wall Street’s slide in the prior session.
The domestically focussed FTSE midcap 250 was also down 1%.
The Fed’s fresh projections called for two 25-basis-point rate cuts next year amid rising inflation right ahead of Donald Trump’s second stint at the White House next month. Policymakers, who see slightly stronger economic growth and lower unemployment next year, indicated concerns over inflation likely re-igniting that could keep rates higher for longer.
A stronger sterling and a spike in British gilt yields also kept UK equities under pressure.
Investors were also on tenterhooks ahead of a local monetary policy decision at 1200 GMT (7:00 a.m. ET), where the Bank of England is expected to keep rates unchanged. Any hints on the future course of policy, especially after this week’s strong wages data, will be at the top of the watch list.
Homebuilders took a sharp hit on fears of a slower-than-expected pace of rate cuts, down 1.6%. In an overall market decline, lenders and investment banking sub-indexes also lost over 1% each.
In a rare bright spot, shares of water utility firms rose after water regulator Ofwat allowed bills to rise by 36% in the next five years. Severn Trent and United Utilities were up over 1% each.
Meanwhile, Serco Group was at the top of the only few gainers on the FTSE 250 index, up 7%, following the outsourcing company’s 2024 trading statement and 2025 outlook.
(Reporting by Ankika Biswas in Bengaluru; Editing by Tasim Zahid)
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic goals such as controlling inflation and stabilizing currency.
Interest rates are the cost of borrowing money, expressed as a percentage of the total loan amount, and they can influence economic activity and inflation.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power, and is typically measured by the Consumer Price Index (CPI).
UK equities refer to shares of companies that are listed on the London Stock Exchange, representing ownership in those companies and their potential for profit.
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