The FTSE 100 was holding firm on Friday in slow trade typical of an August Friday as investors digest a UK interest rate cut and ongoing trade disruptions that could still upset global growth.
The index has hugged 9,100 since the BoE’s decision to cut rates by 0.25% yesterday, and faded back towards this level after a strong start on Friday.
Investors are pondering yesterday’s Bank of England instalment and whether there is scope for further interest rate cuts this year.
The FTSE 100’s performance since the rate decision at 12pm on Thursday suggests the market is unsure about the bank’s latest messaging, as it continues its fight against inflation with the added pressure of a slowing economy.
“Death, taxes, and the BoE tying themselves in knots at every opportunity. Life’s three certainties,” said Michael Brown, Senior Research Strategist at Pepperstone.
“I jest, slightly, but yesterday’s MPC decision saw policymakers very nearly end up holding Bank Rate steady, despite five policymakers voting in favour of a rate reduction.”
Brown continued to explain that while the voting split was undoubtedly hawkish, the doves and equity bulls would have been marginally reassured by comments around gradual interest rate cuts in the future.
“While the 5-4 vote was much more hawkish than had been expected, the statement read a little more dovish,” Brown said.
The pound was flat against the dollar on Friday after surging higher in the wake of the rate cut.
FTSE 100 movers
Fresnillo was the top riser as gold prices rose amid tariff and geopolitical concerns. Adding 3% on Friday, Fresnillo shares extended their gains to 179% so far in 2025 and is by far the best performing FTSE 100 stock on the year.
“US gold futures hit a fresh record high on reporting that the Trump administration has imposed tariffs on imports of one-kilo bars. Sustained by factors like its safe haven credentials and a weakening dollar in 2025 – this latest development will have gold bugs eyeing the $4,000 level.
Glencore was among the top risers as the miner bounced back from a disappointing set of half-year results. Traders will be eyeing the 275p mark as a point of previous support that has once again held.
IHG took up the rear on Friday with a loss of 3% as traders booked short-term profits after the hotel group spiked yesterday.