- FTSE 100 closes down 63 points at 9,100
- Bank of England cuts base rate, ups inflation forecast
- Pound climbs as market expects no more cuts this year
- Some experts still see chance of November rate cut
- Index hit by 12 blue-chips going ex-dividend
- IHG beats profit forecasts, hikes dividend 10%
4.52pm: FTSE 100 in the red
The FTSE 100 closed down 63 points at 9,100 following the BofE’s latest interest rate decision.
Following the decision, Wells Fargo analysts do not expect the BofE to deviate from its quarterly cadence of interest rate cuts.
“Our base case remains for two more rate cuts during the current easing cycle, with 25 bps rate cuts in November and February bringing the policy rate to a low of 3.50% by early next year,” they wrote.
“Our view stems from our relatively underwhelming view of the U.K.'s economic prospects. Amid sluggish demand we think that there is potential for favorable inflation surprises in the months ahead which should be enough, we think, to keep the central bank at a quarterly rate cut pace.”
4.04pm: FTSE can't shrug off BoE arrows
As trading meanders the final yards to the closing bell in London, the FTSE 100 has been unable to shrug off the slings and arrows inflicted by the hawkish Bank of England cut earlier.
The FTSE is down 0.7%, with all but four of the index's 20 largest companies' shares in red this afternoon.
That compares to gains of 1.2% for the DAX in Frankfurt, and almost 1% for the CAC in Paris. US markets are mixed, with the Dow Jones and Russel 2000 down 0.6% and 0.4%, the S&P 500 just below flat, and the Nasdaq rising almost 5%.
Shell and BP are among the bigger fallers, after oil prices fell to a two-month low overnight and made only a small rebound today, with Brent dropping to below $66.4 and oscillating around $67 today.
The biggest faller was Hikma Pharmaceuticals, on the back of results that seemed to disappoint, though some analysts said they were not as bad as they looked.
Defence names, Babcock International and BAE Systems dropped 5.3% and 4.9%, reflecting a glimmer of optimism over US-Russian talks over Ukraine.
3.31pm: Trump calls on Intel CEO to resign
Donald Trump has called for the resignation of new Intel Corp (NASDAQ:INTC) chief executive, Lip-Bu Tan.
In a social media post, the US President alleged that Tan "is highly conflicted and must resign, immediately. There is no other solution to this problem."
No details were put forward by Trump of the alleged conflicts of interest.
However, it follows a letter from Republican Senator Tom Cotton to the board of the US company this week where he expressed "concern about the security and integrity of Intel’s operations" and Tan’s investments in Chinese chip firms.
An Intel spokesperson said: "Intel and Mr Tan are deeply committed to the national security of the United States and the integrity of our role in the U.S. defense ecosystem."
Tan is a longtime technology investor via his San Francisco-based Walden Catalyst Ventures firm, including in US, Chinese and Hong Kong companies, including China's Semiconductor Manufacturing International Corp.
He was also CEO of semiconductor design group Cadence Design Systems Inc (NASDAQ:CDNS) from 2009 to 2021, amidst a 19-year career at the
2.46pm: Wall Street starts higher, US jobless claims at 3yr high
US stocks started strong, led by a 1% jump in the Nasdaq.
Applovin, Advanced Micro Devices, Datadog, Micron, Apple, ASML and ON Semiconductor are top risers.
Meanwhile, US jobless claims rose to the highest level in nearly three years, according to new data from the Department of Labor.
In the week ending July 26, continuing jobless claims rose to 1.974 million, up 38,000 from the prior week to the highest level since November 2021.
This data signals that unemployed workers are taking longer to find new jobs, possibly reflecting softening conditions in the labor market.
2.28pm: US stock futures in green
US stocks are set to extend gains when trading opens in a few minutes, led again by the tech sector, after Donald Trump's new round of tariffs came into effect at midnight.
Nasdaq 100 futures were up 0.7%, those for the S&P 500 rose 0.6% and for the Dow Jones edged up 0.5%.
In the previous session, the Nasdaq Composite jumped 1.2%, the S&P added 0.7% and the Dow 0.2%.
President Trump confirmed 100% tariffs on imported semiconductors and said domestic manufacturers and companies like Apple would be exempt.
CEO Tim Cook accompanied Trump as the iPhone maker committed to investing another $100 billion in the US, on top of its $500 billion already announced.
Carve-outs were also agreed to help the likes of Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC), which have made sure to commit many billions of dollars to US manufacturing.
2.19pm: Bailey expects further cuts but says there is 'genuine uncertainty'
Summing up the BoE presser now.
Governor Andrew Bailey said the Bank is committed to working towards the target inflation rate of 2%, but adds there are "real risks" to achieving it, and more downside activity risks, than had previously been foreseen, while economic growth continues to be subdued.
Dave Ramsden said underlying disinflation is continuing, agreeing that monetary policy is still restrictive.
Bailey expressed optimism that rates will continue on a downward path, but added that there is "genuine uncertainty" about the future of rates.
The unprecedented second round of voting (after the first vote saw a 4-4-1 split) was "sensible to get a clear outcome", he said, and resulted in a 5-4 decision in favour of a cut to interest rates.
"Even though we had two votes […] what really matters is the decision and the outcome - and that’s clear."
2pm: MPC as 'clear as mud'
Here's another expecting a cut in November.
"We have a hawkish vote split, accompanied by a dovish policy statement, and a hawkish set of economic forecasts. All about as clear as mud," says market analyst Michael Brown at Pepperstone.
Trying to cut through some of the noise, Brown says, "we clearly now have a higher bar for further rate cuts", especially with Deputy Governor Clare Lombardelli and Chief Economist Huw Pill having been in the "hawkish dissent camp" and wanting to hold rates.
"That said, the direction of travel for rates clearly remains a downwards one, while the ‘gradual and careful’ guidance implies a continuation of the present quarterly easing pace, and I remain of the view that a 25bp cut will probably be delivered in November, it’s clear that the MPC’s numerous hawks will take plenty of convincing that further loosening is indeed required."
1.42pm: Some still see a November cut
One economist keeping his prediction for a November cut is James Smith at ING.
"We still think the Bank’s concerns about inflation will prove overblown," he says.
"There’s no reason in and of itself that inflation will become more entrenched, simply because headline CPI is sitting above target.
"It relies on workers being able to chase higher wages, as they bid to retain purchasing power. And it relies on firms having sufficient pricing power. The power of households and businesses to do that has clearly faded as the jobs market has cooled."
He also notes that inflation has mainly been driven by "inherently backwards-looking" factors, and/or is heavily linked to regulated price rises.
"There are good reasons to think inflation will ease off in 2026."
That said, Smith says, if wage growth and services inflation stay close to 5% as they currently are, "there’s little reason to think the Bank’s view will change imminently. That's unless the jobs market were to show more visible signs of deterioration, of course."
He also points out that the Bank’s new forecasts, which have inflation perfectly on target in two years' time, are premised on two further rate cuts.
"We're sticking to our call, but were the next couple of inflation reports to surprise to the upside, or if the recent falls in private-sector employment start to ease off, then we’ll be rethinking."
1.25pm: Cut welcomed by businesses
The rate cut is good news for companies, says the British Chambers of Commerce.
"Businesses will welcome the decision," says BRC head of research David Bharier.
"With signs that the labour market is beginning to loosen and unemployment edging upwards, the Bank is right to act to mitigate the risk of a deeper downturn."
He complains that taxes are too high, though, saying rate cuts "are only part of the solution" and firms "need to see a roadmap to lower their cost burden, further improvements to ease trade friction, and greater investment in AI and infrastructure".
1.12pm: A 'meaningful shift in tone' from the MPC
Sanjay Raja, Deutsche Bank’s chief UK economist, says today’s decision is likely to "usher in a rethink of the policy path ahead".
"Markets have pushed back expectations for further rate cuts this year. And uncertainty on the policy path ahead has risen even further."
He says the statement suggests the Bank sees that rates are now seen as less restrictive than before, despite the faster loosening in the labour market, with the MPC toning down its expectations of spare capacity in the medium-term and less keen to emphasise that rates remain 'sufficiently restrictive'.
"This, in our view, is a meaningful shift in tone," he says, with increased concerns around inflation expectations and second-round effects.
"The odds of further rate cuts have fallen – particularly in Q4-25. The path for near-term rate cuts has inexplicably narrowed.
"While the path of Bank Rate remains down, in our view, the next few months mark a murkier path on the scale and pace of tightening."
His key takeaways from the decision and forecasts are that there also seems to be increased divisions within the MPC, as an initial three-way split of 4-4-1 in the vote (four to hold, four to cut 25bps and one – external member Alan Taylor – to cut 50bps) brought about an unprecedented second vote that ended 5-4.
"This was historic," says Raja. "The internal camp is now even more divided."
Deputy governor Clare Lombardelli and chief economist Huw Pill both wanted to maintain Bank Rate at 4.25%.
The MPC kept its language for a ‘gradual and careful’ withdrawal of monetary policy and that monetary policy was not 'on a pre-set path', but noting that the "restrictiveness of monetary policy had fallen as Bank Rate had been reduced" and that the "timing and pace of future reductions in the restrictiveness of policy would depend on the extent to which underlying disinflationary pressures would continue to ease".
This means, says Raja, that the MPC is "leaning more on upside inflation risks – as opposed to downside labour market risks when thinking about its calibration of monetary policy".
12.49pm: Reaction to the BoE cut
The hand being played by the BoE policymakers is still "highly cautious", says Susannah Streeter at Hargreaves Lansdown.
"Although the Bank has opted for a cut, the chances of another reduction by the end of the year have receded sharply."
The MPC vote was split five to four between cut and hold, "so it’s pointing to a very prudent approach ahead".
Neil Wilson at Saxo says he is "bamboozled by this one," with no-one expecting this particular vote split.
"A cut of 25bps as expected but the 5-4 split has upset the market assumptions, sending sterling sharply higher and the FTSE 100 down some more.
"Sterling was bid up as the front end of the gilt yield curve drove higher as markets repriced futures. Not sure if sterling can retain this bid though as I feel the BoE is giving us a bum steer."
He says the vote split is "not very often a great signal of future policy and rather reflects a lack of consensus on what remedy is needed in the here and now".
While lots of economists and others thought the BoE should be upping the pace of cuts, instead today's statement has "pushed back cut expectations", says Wilson, with the market now not seeing another 25bps cut priced until March.
"Given the cloudy MPC vote it's going to be hard to give any really clear guidance to the market now on future policy path. Has it ever?"
The chief reason for the rise in the pound is the "hawkishness contained within the report", with four members voting against a cut not being expected, seemingly as inflation is worse than feared at 4% in September.
12.34pm: BoE presser underway
The BoE press conference is underway, with Governor Andrew Bailey currently talking through the stats.
12.24pm: BoE inflation, wages and GDP forecasts tweaked
The BoE committee's new forecasts signal slightly stronger growth but persistent labour market softness.
The latest set of forecasts show inflation remaining slightly higher over the short term than previously expected.
The Bank now sees CPI peaking at 4.0% in September (up from 3.7% in the May forecast), then gradually easing to 2.7% in one year’s time (up from 2.4%) and unchanged at 2.0% in two years’ time.
Private-sector wage growth is expected to slow more gradually, with 3.75% in 2025 still expected, but estimates for 2026 and 2027 nudged up to 3.25% and 3.0%.
GDP growth for 2025 is seen at 1.25%, slightly firmer than the 1.0% previously projected and with 2026 forecasts unchanged, while the unemployment rate is expected to rise to 4.9% in Q4 this year (up from 4.7%) and remain there next year (down from 5.0%).
The pound is holding onto most of its spike, though market rates are still expecting the Bank Rate to end the year at around 3.8% still expecting just one more cut this year, falling to 3.5% by the end of 2026.
12.11pm: Pound climbs versus USD and EUR
The pound has spiked on the back of the BoE statement, which included an increased forecast.
Sterling has jumped 0.6% against the US dollar to $1.3428, and 0.5% against the euro to £0.8681.
After headline CPI inflation ticked up to 3.5% in the second quarter, due to higher energy and food prices, the Bank now expects it to peak at 4.0% in September, an increase from its previous forecast peak of 3.7% in that same month.
12.03pm: BoE cuts
The Bank of England has cut the base rate to 4.0%.
There was a 4-4-1 split on the MPC, with a 5-4 majority to reduce the rate by 0.25 percentage points rather than maintaining it at 4.25%.
One of the five members who voted for a cut preferred a 0.5 percentage point reduction in the rate at this meeting.
"A gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate," the MPC said in its statement.
"The restrictiveness of monetary policy has fallen as Bank Rate has been reduced.
"The timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease.
"Monetary policy is not on a pre-set path, and the Committee will remain responsive to the accumulation of evidence."
Quite an achievement that not a single forecast was correct despite this super-wide range of expectations ???? https://t.co/L06g3AVu99
— Michael Brown (@MrMBrown) August 7, 2025
11.34am: Mortgage rate inversion
Some notable mortgage news, with the average two-year fixed mortgage rate has dropped below the five-year for the first time since September 2022, according to Moneyfacts.
Rachel Springall, finance expert at the site, says: "Millions of borrowers coming off a fixed rate deal this year will be delighted to see fixed mortgage rates on the downward trend, with the average two-year fixed rate dipping below its five-year counterpart for the first time since September 2022.
"Back then, mortgage rates started to rise dramatically, in the aftermath of the ‘mini-Budget’ and it caused mass panic for those struggling to buy their first home.
"Thankfully, time is a healer, with lower rates, much more market stability and a relaxation in stress testing, mortgage prisoners might now be free to refinance.
"The end of the inversion in the two- and five-year fixed rates, if sustained moving onward, will bring borrowers back to a more traditional mortgage market, where it’s more expensive to secure a longer-term fixed mortgage.
"Lenders will no doubt be keeping a close eye on swap rates and react quickly should the path change in the coming weeks.
"This may well be the time for borrowers to act quickly to secure a deal, so it’s wise for them to seek advice to navigate the mortgage maze."
11.02am: Bank of England's dilemma
With less than an hour to go until the BoE decision, let's see what people are saying about it.
Here's a good summation of the "unenviable dilemma" facing the monetary policy committee (MPC), from Matthew Ryan, strategist at Ebury.
Economic data has "turned sour", he says, with GDP contracting on a monthly basis in April (-0.3%) and May (-0.1%), PMIs are consistent with stagnation, consumer spending is fragile and the jobs market is in "near-total capitulation" with the number of employees on HMRC payrolls data declining in each of the past five months, with jobs being shed at the fastest pace since the data was first shared in 2014 (outside of the pandemic).
"In and of itself, the performance of economic activity and the labour market would probably not only warrant an August rate cut, but the commencement of an aggressive pace of easing from there on out.
"Yet, the committee has a delicate balancing act on its hands, as it is grappling with both the prospect of weaker economic growth ahead and an increase in consumer price growth. UK inflation jumped to 3.6% in June, which is both the highest level since January 2024 and almost double the MPC’s 2% target."
With the MPC expecting CPI inflation will peak at 3.7% in September, before gradually declining towards the BoE's 2% target in 2026, Ryan notes that
“The problem for the bank is that upside risks to prices remain prominent, notably originating from elevated wage pressures, high energy bills and rising food inflation, which is forecast to hit 6% by year-end."
"These conflicting risks mean that the vote on rates will almost certainly be split on Thursday.
The pound could react, depending on two things, he says, the voting pattern among MPC members, and whether or not the BoE maintains its forward guidance.
"While we are bracing for a 7-2 split vote, we would not be overly surprised if Dhingra and/or Taylor voted for a 50bp cut, as they did in May.
"This, we believe, would likely trigger a sell-off in the pound this week, as would a ditching of its “gradual and careful” guidance, which we contend is rather unlikely.”
Jeremy Batstone-Carr, strategist at Raymond James, says how BoE governor Andrew Bailey and the MPC couch their accompanying commentary "will send a strong signal regarding its perception of the trajectories for economic activity and inflation in coming months, and by extension the interest rate pathway".
He says the "big question" is whether the MPC is prepared to drop its long-standing 'gradual' wording "in favour of less optionality".
However, with inflation presssures building, he thinks the forecast CPI peak of 3.7% "is likely to be raised to 4.0% or higher, a level that the more hawkish MPC members indicate could force households to push for higher wages".
With financial markets are anticipating just shy of 0.5% points of rate cuts by year-end (including today's cut), with the Autumn Budget and potential further tax hikes to come, he says "the Bank may wish to opt for a monetary policy offset to ease the pressure on households and businesses, although not until much later in the year".
10.16am: European markets strongly higher
It's been a mostly positive start for European markets today, with mainland indices such as Germany's DAX and France's CAC up 1.3% and 0.9%.
The FTSE 100 may be down 0.3%, due to a combination of some heavyweight stocks going ex-dividend and fallers for Hikma and WPP, but the FTSE 250 is up 0.2%.
Harbour Energy PLC (LSE:HBR) and Serco Group PLC (LSE:SRP) are topping the mid-cap risers.
Harbour reported a positive first half of 2025, with a $100 million share buyback announced as it increased production and improved financials.
Serco reported interim results slightly ahead, and also unveiled a new £50 million buyback.
On the Continent, the DAX is pushing higher despite a slump in both German industrial production (-1.9%) and trade balance for June, says market analyst Joshua Mahony at Rostro.
"Coming at a time where Trump has been laser focused on the need to bring down their trade deficit, today’s data out of China and Germany have seen both countries suffer lower exports to the US in response to recent trade policies.
"Notably for China they managed to make up for that shortfall in direct exports to the US by increasing indirect sales via Asia and improved activity with Europe."
Chinese exports rose 7.2% in July, after climbing 5.9% in June. Consensus was 5.6%.
"Today undoubtedly marks the beginning of a more disruptive period for global trade, with Trump’s tariff rates coming into effect.
"For many this will be the beginning of a new normal, with businesses adjusting to rates around the 10-20% mark."
He notes that Trump has taken aim at the semiconductor industry, placing 100% tariffs on imports in a bid to bring manufacturing into the US, which the likes of TSMC have already been building.
However, for the likes of Super Micro Computer and AMD, this news adds to the already downbeat tone struck by disappointing earnings this week.
"Notably, the tariffs placed on semiconductors do not cover items which already contain chips within them, meaning that the vast majority of chips coming into the US will not be hit by this 100% levy," says Mahony.
9.55am: Costs of importing and exporting going up
The Office for National Statistics has shared its fortnightly 'real-time indicators' from the Business Insights and Conditions Survey (BICS) showing the impact of challenges facing the economy and other events on UK businesses with more than 10 employees.
This includes 22% of exporting businesses reporting a greater level of exports compared with this time last year, the highest proportion reported since this response option was introduced in March 2022.
Of those businesses, 34% reported that the cost of exporting in June 2025 was higher than a year ago, down from 36% from the March survey.
As for imports, 27% of businesses reported that they had imported goods and/or services in the last 12 months, of which 17% reported they had imported more in June this year compared to last, while 14% imported less.
Just over a third, 35%, reported higher importing costs, down from 40% in March and broadly stable with the December survey.
In late July, 32% of exporters reported they were impacted by US tariffs in the last month; the most reported impact was additional costs at 18%.
Around 31% of exporters said they expect to be impacted by US tariffs in the next month, mostly saying they would pass on additional costs to customers (13%).
9.28am: New rules for payment firms pushed back 9 months
The FCA says it is introducing new rules to improve safeguarding practices among payment firms in nine months, meaning consumers will need to wait a little longer for these extra protections.
Safeguarding rules require customer money to be kept separate from the firm’s own money, protecting it and making it available for return if the firm fails.
Following consultation with the industry, the FCA has confirmed that the new rules will kick in after nine months, "giving industry time to prepare".
The changes will ensure that rules are "proportionate" for smaller firms, meaning there is no requirement for audits.
Matthew Long, director of payments and digital assets at the FCA, said: "People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket.
"Most of those who responded to our consultation agreed we need to raise standards to protect people’s money and build trust, but any changes needed to be proportionate, especially for smaller firms."
9.17am: German group buys Epwin
Shares in Epwin Group PLC (LSE:EPW) soared 31% after its board agreed to a recommended £167.3 million cash takeover by the UK arm of German construction products firm Laumann Group.
The deal, priced at 120p per share, compared to the last close at 91p for the UK maker of windows, doors, and roofing products.
The deal is backed unanimously by Epwin’s directors.
Laumann, a European group aiming to broaden its presence in the UK, highlighted Epwin’s strong brands and limited overlap with its current business, viewing the move as a strategic expansion into an attractive and growing market.
8.49am: Hikma, WPP fall sharpest, while IHG tops leaderboard
Hikma Pharmaceuticals PLC (LSE:HIK, OTC:HKMPF) shares have slumped 7.3% after interim results showed a 25% fall in reported operating profit, with core profits down 6%.
The interim dividend was hiked 12% and guidance for the full year was unchanged.
"The bears might grab onto lowered Injectables margin guidance but this looks to be down to currency and mix rather than anything else and is being offset elsewhere," says analyst Seb Jantet at Panmure Liberum.
Richard Hunter, market analyst at Interactive Investor, notes the "pressure which the pharmaceutical sector has been facing of late, not least of which is due to the various tariff threats emanating from the US".
Elsewhere, WPP PLC (LSE:WPP) is down 4.2% after its interims.
It can "currently do little right in the eyes of investors at the moment," says Hunter, with its half-year numbers failing to impress, with a drop in opening exchanges leading to a decline of 53% in the share price this year alone.
Top of the leaderboard is Intercontinental Hotels Group PLC (LSE:IHG), up 6.1% as numbers beat expectations.
Noting that revPAR growth slowed, analyst Ivor Jones at Peel Hunt says: "Easter falling in April didn't help, and broader macro pressures also weighed on travel demand."
He is not changing forecasts today, he adds, with IHG stating that it is on track to meet full-year consensus.
"Today’s results demonstrate that IHG does not require high revPAR growth to deliver strong profit growth. With net system size growth of 5.4% and excellent margin progression, we believe IHG is on track to meet our high-end FY25E forecasts."
8.38am: Deliveroo impresses, Doordash getting a 'kingmaker asset'
Deliveroo PLC (LSE:ROO) delivered a very strong set of results, but its shares are little moved as it agreed to be bought by DoorDash back in May.
EBITDA is around 12% ahead of the City analyst consensus on net income around 16% ahead when excluding deal fees from the Doordash bid.
Boker Panmure Liberum says: "Overall, a very strong first half from Deliveroo which highlights the exceptional quality of the UKI business. This will be a European kingmaker asset for Doordash should the bid go through (it has received shareholder approval but awaits regulatory approval - we don't anticipate any challenges obtaining that).
"While we had thought Amazon might counterbid, clearly that scenario has not materialised."
8.15am: FTSE index hit by ex-divs
The FTSE 100 has opened lower, as predicted, dropping 19 points or 0.2% to 9,145.
This is almost entirely due to a heavy slate of blue-chips going ex-dividend today, collectively shaving 18.3 points off the index.
This includes AstraZeneca, BT Group, NatWest, Barclays, and Reckitt Benckiser.
For the uninitiated, going ex-dividend means investors who purchased shares today are no longer entitled to their latest dividend payouts, so does not reflect underlying market sentiment, but is enough to weigh on the benchmark at the open.
The full list (via the useful dividenddata.co.uk website) is led by AstraZeneca (whopping 76.7p dividend resulting in a 4.95 points index adjustment), Reckitt Benckiser (84.4p, -2.38 points), Barclays (3p, -1.73 points), NatWest Group (9.5p, -1.68 points), BT Group (5.76p, -1.67 points), Rolls-Royce (4.5p, -1.56 points), RELX (19.5p, -1.49 points), Ashtead Group ($0.72, -0.93 points), Standard Chartered ($0.123, -0.89 points), SEGRO (9.7p, -0.55 points), Informa (7p, -0.38 points), and St. James's Place (6p, -0.13 points).
7.57am: IHG profit beats estimates, despite revPAR slowing
Intercontinental Hotels Group PLC (LSE:IHG) looks like it has booked in a sizeable beat with its interim numbers, with a pre-tax profit of $633 million well ahead of consensus estimates of $516.9 million.
The company declared an interim dividend of 58.6 cents per share and said it remains on track to meet full-year expectations.
However, it is not all a glowing report card, with growth in global revenue per available room (revPAR) slowing to 1.8% for the half, from the 3.3% growth in the first quarter.
CEO Elie Maalouf said: "We remain on track to meet full year consensus profit and earnings expectations.
"While some shorter term macro-economic uncertainties remain, many are subsiding, and we are confident in the ongoing successful delivery of our growth algorithm".
7.33am: WPP halves dividend
WPP PLC (LSE:WPP) has reported a sharp fall in profit and cut its interim dividend by half, as the advertising group's interims were in line with its recent trading update.
Facing pressure from weaker client spending and slower new business activity, revenue for the first six months of 2025 fell 7.8% on a reported basis to £6.66 billion, while revenue less pass-through costs declined 4.3% on a like-for-like basis.
Headline operating profit tumbled 29% LFL to £412 million, as margins shrank by 2.9 percentage points, while reported operating profit dropped 47.8% to £221 million, impacted by a £116 million goodwill impairment.
CEO Mark Read, who will step down at the end of August, said that amidst the market challenges WPP has made "significant progress on the repositioning" of its Media segment.
New CEO Cindy Rose will take over on 1 September, with a review of strategy and capital allocation already planned.
7.26am: BoE cut expected
The Bank of England decision will be revealed at midday, with a rate cut widely expected to bring the base rate down to 4.0% from 4.25%.
However, not everyone on the monetary policy committee (MPC) is likely to agree, with some members wanting to keep rates on hold, and some wanting a larger cut. Some members in recent meetings have even called for rates to be increased.
Economists are extremely divided over what the vote split will look like, as this tweet shows.
BoE vote split f'casts are all over the shop...
3-4-2: HSBC
3-6-0: Jefferies
2-7-0: Peel Hunt, Unicredit
2-6-1: GS
2-5-2: Berenberg, BofA, Barx, DB, Investec, JPM, Lloyds, Nomura
2-4-3: Pantheon
1-7-1: MS
1-6-2: Citi
1-8-0: RBC
0-9-0: NW
0-7-2: BNP
(unch-25bp cut-50bp cut)
— Michael Brown (@MrMBrown) August 7, 2025
7.15am: FTSE 100 predicted to dwindle
The FTSE 100 is predicted to dwindle slightly in Thursday's opening trades, despite a healthy session on Wall Street overnight and positive trading in most of Asia this morning.
Futures are calling the London index 6 points lower, undoing some of the near-22-point gain from yesterday that saw the index close at 9,164.3.
Tech stocks led the way in the US overnight, something the Footsie lacks, with the Nasdaq climbing 1.2%, the S&P 500 adding 0.7% and the Dow Jones edging up 0.2%.
For the third day in a row, India is the only Asian market in the red, after Donald Trump confirmed tariffs on the country's goods will be lifted to 50%.
At midnight in the US last night, US tariffs increased on $1.6 trillion of imports from more than 90 countries, ranging from 5% for EU and Japan to much higher, with the overall tariff rate driven up more than 2%.
Back in the UK, house prices rose 0.4% in July, Halifax data shows, the largest monthly increase in 2025 so far.
6.30am: FTSE 100 Live on Thursday 7 August
It's Bank of England decision day, with a quarter-point cut to 4.0% for the base rate widely expected today.
What will be worth watching for the BoE anoraks is a potential three-way split between monetary policy committee (MPC) members, as they pick over some thorny economic data.
Amidst a softening labour market and lingering inflation concerns, the MPC is also due to release its quarterly monetary policy report.
Before that, there’s a healthy flow of FTSE 350 company results scheduled.
WPP PLC (LSE:WPP) let investors down early ahead of its interims, sending its shares plummeting to a 16-year low last month as it warned of lower revenue and profit expectations this year.
Analysts and investors were already worrying about how the advertising industry is likely to be profoundly disrupted by artificial intelligence, and this sent toppling any who were still on the fence.
Newly appointed CEO Cindy Rose, ex of Microsoft and Disney, does not start until September.
Elsewhere, Intercontinental Hotels Group PLC (LSE:IHG) was the other side of the coin, reporting a solid start to the year last time it came to market.
Strong demand in Europe and the Middle East offset a decline in China, the owner of the Holiday Inn and Crowne Plaza hotel brands said, adding that it is "on track" to meet current full-year 2025 consensus profit expectations.
Global revenue per available room (revPAR) grew 3.3% for the first quarter of 2025, compared to 3.0% over the whole of last year.
In macroeconomic news, the Halifax house price index will be issued at 7am.
Announcements expected:
Trading updates: Flutter Entertainment
Interims: Burford Capital, Deliveroo, Dowlais Group, Harbour Energy, Hikma Pharmaceuticals, Hutchmed (China), InterContinental Hotels Group, Mears Group, Morgan Advanced Materials, Serco Group, Spectris, WPP
Overseas announcements: Eli Lilly, Merck, Viatris (all premarket), Block, Gilead Sciences, Pinterest, Take-Two Interactive Software, The Trade Desk, Twilio (all afterhours)
Economic announcements: Balance of Trade (CHN, GER, FRA), Halifax House Prices (UK), Bank of England Decision (UK), Initial Jobless Claims (US), Wholesale Inventories US), Consumer Inflation Expectations (US)