The FTSE 100 opened the week with a measured but notable lift, aided by growing expectations that the Bank of England is finally ready to adjust course on interest rates. After a long phase of holding firm, monetary policy in the UK is now leaning towards accommodation.
At the centre of this is the assumption, now more consensus than speculation, that the BoE will cut its base rate by 25 basis points, easing it from 4.0% to 3.75%. Recent UK economic data, particularly the softening in inflation prints and signs of a labour market plateau, has created a clearer path for action.
Equity markets have begun to respond. In Monday’s session, the FTSE 100 edged up, with financials, materials, and luxury consumer names catching renewed interest. Banks gained ground as investors began to revalue capital buffers and loan growth dynamics under more accommodative conditions. Meanwhile, gold and precious metals names found support as yields eased and sterling pulled back modestly.
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