UK stocks boosted as Bank of England upgrades outlook for economy
The FTSE 250 lurched by 3.6% on Thursday and the FTSE 100 closed 0.76% higher.
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Your support makes all the difference.UK stocks have enjoyed a boost as the Bank of England revealed it expects Britain to fall into a shorter, shallower recession than previously anticipated.
The FTSE 250 lurched by 3.6% on Thursday, as the slightly more upbeat outlook on the UK economy prompted investors to pour cash into the more domestically-focused index.
While the UK is headed for a recession this year, the Bank said it expects the downturn to be softer than it had predicted in November, and much shallower compared to previous recessions like that following the 2008 financial crisis.
It also hinted that interest rates could be nearing a peak, after hiking up the base rate to 4% from 3.5%.
London’s leading index, the FTSE 100, jumped by 0.76%, closing the day 59.05 points higher at 7,820.16.
It was driven up by gains of more than a 10th for sportswear giant JD Sports, which unveiled expansive store-opening plans, and grocer Ocado Group.
It was a more turbulent day for the pound, which briefly spiked against the US dollar following the Bank’s rate decision at noon.
But it tumbled during the afternoon, and was down 1% to 1.2251 dollars when markets closed.
Sterling was also down by around 0.3% to 1.1228 against the euro.
Meanwhile, the European Central Bank (ECB) also opted to raise interest rates by 0.5 percentage points, which affects all EU nations that adopt the euro.
It prompted a good session for the German Dax which leapt up by 2.16%, and the French Cac also lifted by 1.26%.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have moved strongly higher after the Bank of England and ECB both raised rates by 0.5 percentage points which was in line with expectations, with the Dax moving to a new 11-month high, while the FTSE 250 has outperformed the FTSE 100, moving to its highest levels since June last year.
“While the tone of both press conferences would appear to suggest that both central banks have further to go in raising rates, markets appear to be taking the view that we’re near a peak as far as rates are concerned, and even if they aren’t done yet, they are close, sending bond yields falling sharply across the board.”
Across the pond, it was a mixed bag in early trading with the S&P 500 up 1.35% and Dow Jones down 0.35% when European markets closed.
In company news, shares in Shell closed the day down 1.1% as the oil major was once again thrust into the spotlight when it reported the highest profit in its history.
The business said that its core profits hit 84.3 billion dollars (£68.1 billion) last year, adding that it had paid 1.9 billion dollars in windfall taxes to UK and EU governments.
Labour said that the Government was allowing Shell to get away with “bumper profits” as people see their energy bills skyrocket.
BT’s shares showed a surprise jump on Thursday despite the company missing revenue consensus in the third quarter of the financial year.
The telecoms company said that the consumer-facing business was up against “tough” market conditions as turnover fell 3% in the three months to the end of December.
Part of the drop was due to BT parting ways with BT Sport, which has been palmed off into a joint venture with Disney.
Shares rose by 6.7%.
Superdry shares jumped 4.1% after the company’s founder and chief executive said he does not plan to take the company private.
The biggest risers on the FTSE 100 were Ocado Group, up 74.6p to 734.8p, JD Sports Fashion, up 18.2p to 181.5p, Persimmon, up 121.5p to 1,531p, Segro, up 70.2p to 920.20p, and Scottish Mortgage Investment Trust, up 58.2p to 805.4p.
The biggest fallers on the FTSE 100 were Airtel Africa, down 5.1p to 111.2p, Centrica, down 3.17p to 98.18p, BAE Systems, down 24p to 830p, BP, down 13.65p to 478.8p, and Standard Chartered, down 17.8p to 669.6p.