- FTSE 100 rises over 63 points to 9,838
- BoE cuts Bank Rate to 3.75%
- BP replaces CEO after less than 2yrs
- Currys and Whitbread tops FTSE 350 risers
4.55pm: FTSE moving back towards highs
The FTSE 100 has closed up 63.45 points at 9,837.77, with a late surge that takes London's blue-chip index to less than a hundred of its all-time high.
Apart from Whitbread gaining from its new activist investor, gainers are led by precious metals and a reboubd in aerospace & defence.
Fresnillo, Rolls-Royce, BAE, Melrose and Endeavour Mining are topping the leaderboard.
Heavily SS-exposed names like Rentokil Initial, JD Sports and Ashtead are also up.
“Whilst today’s rate cut had been almost entirely priced in by markets, there was still a degree of jeopardy and plenty for investors to gnaw over in the all-important post-cut debrief,” says Danni Hewson, head of financial analysis at AJ Bell.
“For borrowers the bank has delivered a shiny pre-Christmas gift, though savers can be excused for not sharing the festive glee."
She says giving Brits "an extra incentive to splurge rather than save will be heartening to both the retail and hospitality sectors" at the end of the ‘golden quarter’.
Retailers including Next, Marks and Spencer and Frasers have edged up today, helped along by Currys’ forecast-beating results, with housebuilders too as investors hope falling rates will tempt more housing market action.
All but around 15 Footsie stocks are in green today, so there's not many that are heading higher.
4.02pm: Finishing with momentum
The Footsie is finishing on a stronger note, up 57 points with half an hour to go.
This is only a 100 from its all-time high in the first half of November.
London's mid-caps too, with the FTSE 250 rising 138 points or 0.6% to 22,304.
3.27pm: Trump Media fuses with nuclear rising star
Across the pond, Donald Trump's social media business, Trump Media & Technology Group Corp (NASDAQ:DJT), has agreed to merge with TAE Technologies, a nuclear fusion developer.
TMTG, which owns the US president’s Truth Social platform, said the merger will make it the world’s first publicly traded fusion companies.
Essentially, with Truth Social only being a cash shell with the President's mouthpiece that only he uses, the deal is like a SPAC deal.
TMTG has a pile of cash and TAE is developing some exciting/pie-in-the-sky energy technology (delete as you see fit).
As part of the transaction, TMTG has agreed to provide up to $200 million of cash to TAE at signing and an additional $100 million upon initial filing of the Form S-4.
The next-generation fusion technology from TAE, which has raised morethan $1.3 billion in private capital to date from Google, Chevron Technology Ventures, Goldman Sachs and Sumitomo, is "poised for commercial application".
Shares in TMTG surged 34%.
2.55pm: US stocks open higher, Micron and Lululemon out in front
Wall Street has started the day on the front foot, with the Nasdaq at the head of the move.
The tech-powered exchange's composite index is up 1.1%, with the S&P 500 rising 0.8% and the Dow Jones climbing 0.45%.
Top of the Nasdaq leaderboard is Micron Technology, up 15.7% after its overnight earnings impressed.
Next is Lululemon, up 7% on reports of activist activity, similar to Whitbread below.
In this case, Elliott Management has built a $1 billion stake in the athleisure retailer, according to Reuters, and is working with former Ralph Lauren executive Jane Nielsen.
Back in London, the FTSE's search for direction goes on, up now, after falling into the red after the BoE decision.
1.42pm: Pound rises
The pound is up 0.3% against the dollar as the BoE, close to a two-month high.
The MPC "stopped short of fully validating hopes that it would turn significantly more dovish in response to weak growth and fading inflation risks", says economist Kallum Pickering at Peel Hunt.
But, he says that looking at the opening statement from the minutes "the tone is more dovish than the vote split suggests, with policymakers noting faster disinflation and giving a clear signal for further cuts".
This includes inflation now expected to fall back towards target more quickly in the near term, a "somewhat less pronounced" risk from inflation persistence, and expectations that rates are likely to continue on a gradual downward path.
Pickering reckons more cuts are to come in 2026, with all policymakers now less concerned about potential inflation risks.
Looking ahead, he expects another cut as soon as the next meeting in February, but only if there is "further substantial disinflation".
"The risks are skewed towards the the BoE waiting until March to reduce Bank Rate again - especially if growth starts to reaccelerate."
12.41am: MPC are being too cautious, some say
Reactions to the BoE decision are flooding in, as ever.
Stuart Morrison at the British Chambers of Commerce says the interest rate cut to 3.75% "is a much-needed Christmas gift for businesses across the UK."
But with flat UK economic growth, unemployment up and inflation easing, the decision was widely expected, and he says the MPC "is likely to need more evidence that inflation is under control before agreeing to further rate cuts next year".
"Today's close vote by the committee underlines the uncertainty ahead. With firms being hit by the high cost of borrowing, and a raft of other financial pressures, their confidence remains low."
Jonathon Marchant, fund manager at Mattioli Woods, said "the fact that any of the members voted to hold interest rates under the current circumstances is perplexing" given that economic growth is being "propped up by government spending" and wage inflation is also public sector driven.
"Lower interest rates are key to driving forward economic growth and central to the achievement of many of the government’s stated aims."
Marchant said Bailey could become "a more suitable candidate" for the "too late" moniker that US President Donald Trump has branded the Chair of the Federal Reserve for his cautious stance on cutting interest rates.
Liam Daly, Cebr senior economist, says the recent inflation and jobs numbers "strengthen the case for greater monetary policy support, especially coming off the back of a Budget containing some disinflationary measures but little to stimulate a lacklustre economic growth outlook”.
12.17pm: BoE explains its decision
The FTSE has dropped due to the details from the MPC, including a continued guidance that rates are likely to continue on a "gradual downward path" but also that "judgements around further policy easing will become a closer call".
Governor Andrew Bailey explained that the 0.25% cut, the sixth since August 2024, reflects inflation having fallen a long way from its peak of over 10% three years ago, dow to 3.2% in the latest measure.
"We think that Bank Rate is likely to fall gradually further in future, but that will depend on whether variables like pay growth and services inflation continue to ease.
"We set interest rates to make sure that inflation falls all the way back to the 2% target and stays there," the statement said.
Further comments indicate the MPC feels most jobs market data "had not suggested a rapid opening up of slack in the economy, even though the unemployment rate had continued to move higher".
Staff forecasts from the BoE now expect inflation to rise temporarily this month due to tobacco duty and airfares, but inflation is now expected to fall back towards target more quickly in the near term, easing in the first quarter of 2026 to around 3%, then closer to 2% in the second quarter.
The Budget is seen as likely to cut inflation in April 2026 by around 0.5 percentage points.
Zero growth is now expected in the fourth quarter of this year, down from the November forecast of 0.3%.
12.03pm: BoE cuts rates
The Bank of England has cut the base rate to 3.75%, as expected.
Monetary Policy Committee members voted by a majority of 5-4 for the cut, the Bank said.
The FTSE has fallen flat.
11.55am: Landmark day
The BoE decisionis due in 5 mins.
The TUC's general secretary Paul Nowak has chipped in on the Employment Rights Act.
He says it is "a landmark day for millions of workers" as the act "represents the biggest upgrade in workers’ rights in a generation".
"It will deliver common sense changes like banning exploitative zero hours contracts, protecting workers from harassment and sick pay for all – and so much more. These are hard-won rights that the union movement and workers have long campaigned for."
He adds: "It’s now vital the government finishes the job – ensuring workers feel the benefits of all these new protections as soon as possible. That means watertight secondary legislation, which delivers new rights fully and quickly."
11.49am: Whitbread climbs as activist calls for review
Sorry, technical issues. Back online now, and the FTSE 100 has picked up a little since the open.
Top of the leaderboard is Whitbread PLC, after activist investor Corvex Management called for a strategic review at the Premier Inn owner after building up a 6% stake.
The New York outfit said it had invested because "we believe the current market price reflects not only a discount to the company’s fundamental value, but a discount to the value of the company’s fully-owned and operated UK hotel portfolio alone".
Following the changes to rates in the Budget it believes the company "should undertake a strategic review to assess it capital allocation priorities and overall strategic direction".
Whitbread has esimated higher business rates in the Budget will cost it £40-50 million in the next fiscal year.
11.44am: Employment rights bill - businesses have major concerns
Some industry reaction to the news that Labour's Employment Rights Bill has received Royal Assent and will soon be passed into law.
British Chamber of Commerce director Kate Shoesmith says: "Royal Assent is a key milestone as it allows businesses, the unions and government to now focus on getting the detail right, to ensure everyone is ready for the coming changes.
“The consultation on the secondary legislation, which will govern much of the day-to-day practicalities of employment rights, is now going to be vital.
“Businesses are clear they still have major concerns about the workability and costs of several other powers in the Bill.
“These include issues relating to guaranteed-hours contracts, seasonal and temporary workers, thresholds for industrial action, and the practical application of union rules.
“It is hugely important that workable agreements are found through further discussions, using the tripartite model that led to the compromise on unfair dismissal.
“Businesses, especially smaller ones, will need a lot of support and guidance from government to make sure they get this right and have the correct policies and processes in place.
“They will want to do the right thing, but the sheer scale of these changes means the challenges this presents cannot be underestimated.
“In terms of immediate impact, nothing is changing, but businesses will need to look ahead.
“Due to the delays in agreeing the final shape of the Bill, there will be a wave of fresh consultations beginning in January.
“The BCC will be putting together a programme of support for Chambers and firms to help them prepare for, and then implement, changes as they are introduced.
“Businesses shouldn’t panic and we would advise them to be careful about offers of external help, from organisations that are unknown to them. There is a long way to go on this legislation, and the best advice will come from those most involved in it.”
11.29am: Employment Rights Act has become law
The government says over 15 million people across the UK will soon benefit from new worker protections on low pay and insecure zero-hours jobs, as the Employment Rights Act has become law today.
New rights confirmed include day-one paternity leave and parental leave, statutory sick pay, protections for pregnant workers, increased protection from unfair dismissal, an end to exploitative zero hours contracts, and a new right to bereavement leave.
The government said it will continue to work with business and workers groups on how reforms are implemented, with the changes introduced gradually over a two-year period.
Prime Minister Keir Starmer said: "Today we have proved what a pro-business, pro-worker government can achieve – a modern framework for worker’s rights.
"This Act sets in motion an increase in living standards, supporting productivity and, importantly, more security and dignity for people in work.
"When we said we’d bring work into the 21st century, we meant it – and today we’ve delivered it."
11.24am: BP CEO reaction
Paul Gooden, portfolio manager at Ninety One, says he suspects BP chairman Albert Manifold "was encountering resistance to change within BP" and the appointment of an external CEO "will help to remove some of those internal barriers".
Incoming boss Meg O'Neill's experience, particularly her 23 years at Exxon, "should mean she brings a renewed focus on execution and capital allocation (areas where BP has underperformed in recent years)", says Gooden, who is co-portfolio manager for his firm's global natural resources strategy.
"However, there are no silver bullets, fixing BP's over leveraged balance sheet won't be easy, and Woodside's shares underperformed peers during Meg's tenure as CEO."
9.53am: Why the BoE decision will be interesting
Money markets are currently putting a 97% chance on the Bank of England cutting the base rate to 3.75% today.
The decision "should be uncontroversial," what with stagnating growth, easing inflation and rapidly cooling labour markets, says Kallum Pickering at Peel Hunt.
"But the meeting will be one to watch closely," he says, for three reasons.
The first is that, with the UK "over the inflation hump" and with the budget out of the way, "it clears a path for the hawks to soften their warnings about sticky inflation into 2026".
Pickering sees the vote being split 5-4 or 6-3 in favour of a cut (with some hawks still backing no change), but "the dovish surprise could be that arch-hawks like Catherine Mann or chief economist Huw Pill side with the doves and back a cut".
Second, the BoE will provide an updated assessment of recent economic data and inflation trends, so the interest will be to see whether policymakers "judge that the softness since summer is a temporary blip which they do not need to lean against or evidence that monetary policy is at risk of being left too tight for too long?"
Third, the minutes from this meeting will be examined to see if they provide "a sufficiently strong signal that the BoE will cut at the next meeting in February", with money markets odds-on for a cut in the first quarter but unsure whether it could come in the February or March meeting.
Pickering's view is that "inflation risks have moderated sufficiently amid broad-based evidence of weakening demand that the BoE should take a dovish turn at today’s meeting - and our base case is for another cut in February".
9.06am: Currys good H1 but only 10% of full year
Currys shares are up over 6% on some strong first-half results.
Analyst John Stevenson at Peel Hunt says the interim results were ahead of revenue and PBT forecasts but points out that the Curry first half "only represents 10% of expected full-year performance".
LFL sales in both the UK and Nordics both improved, both +4% on last year, which is "a strong performance against a UK market down 1.2% YoY".
UK adj EBIT was down £4 million to £23 million, reflecting the drag of costs from UK employment costs, "which we expect to be offset in the relatively profit-heavy second half".
"Consensus forecasts are unlikely to change given the weight of peak, but progress suggests upside potential for the January trading update."
8.49am: New BP boss 'has fight on hands'
Some reaction to the news of Meg O'Neill becoming the first woman to run one of the traditional 'oil majors' at BP.
Shares in BP rose 1.5% in the first couple of minutes of trading, then quickly fell into the red and now are roughly flat. (Brent crude prices are little moved at just below $60 a barrel, and Shell shares are up 0.3%.)
"In a world of JR Ewing-style oil barons, BP has appointed Meg O’Neill as the first external candidate to take BP’s top job," says Derren Nathan, head of equity research at Hargreaves Lansdown.
Colorado-born O'Neill is "already an oil veteran" after 23 years at ExxonMobil and seven at Woodside Energy in, he says.
"With the sector facing pressure, consolidation is the talk of the town, but BP is most frequently seen as prey rather than the hunter.
"Rival Shell has distanced itself from takeover speculation, but there are other potential suitors. O’Neill may have a fight on her hands to ensure BP’s not sold for a song, and to keep a seat at the table if it were to join forces with a competitor."
He notes that outgoing boss Murray Auchincloss’s future "has been in the balance" ever since activist investor Elliott Management took a stake in BP, with chairman Helge Lund going in July.
"Investors will now be hoping O’Neill has a firm plan to shore up the balance sheet, improve profitability and define BP’s role in the energy transition."
8.23am: AI bubble deflating?
"The AI bubble may be deflating," says analyst Ipek Ozkardeskaya at Swissquote Bank.
She says the "AI selloff intensified yesterday on two major developments that aggravated investors’ concerns about circularity and leveraged-debt risks".
The first was Amazon reportedly being in talks to invest $10 billion in OpenAI, but only if OpenAI buys Amazon’s homegrown Trainium chips, which was reminiscent of OpenAI's recent contract with Nvidia and "raised questions about circularity, contagion risk, and marked the start of waning AI enthusiasm".
Then Oracle was unclear about the funding for an equity deal for a Michigan data centre project, with Ozkardeskaya saying the suspense was "forcing investors to reassess who is actually backing the project and how secure the funding is — especially given spiking credit default swaps, which suggest rising fears of default tied to Oracle’s leveraged projects, one of which was recently delayed due to labour and material shortages".
Oracle is down 45% from its peak, Nvidia fell 3.8% and Amazon was down 0.6%.
"Perhaps it is happening: the AI bubble may be deflating," says Ozkardeskaya.
"How far the selloff will go remains unclear, but high valuations could justify a 10–20% drop from peak to trough, implying the Nasdaq could fall below 21’000. Not the Season Finale investors had hoped for after a strong year."
8.15am: Quiet start
The FTSE 100 has opened slightly higher, initially up 10 points before quickly being cut to five at 9,780.
Top of the early risers is Rentokil Initial, up 3.1%.
Behind is the volatile Metlen Energy & Metals, up 1.3% and London Stock Exchange Group, up 1%.
Others in the wake are a real mix, Compass Group, Barratt Redrow, BAE Systems, Sainsbury's, Rolls and Ashtead.
7.53am: Currys reports hot first-half profits
Currys PLC (LSE:CURY) reported a sharp rise in first-half profit and cash flow, underpinned by growth in both its UK & Ireland and Nordic businesses.
The electrical products retailer maintained its guidance for the full year, expecting continued growth in profits and free cash flow.
For the six months to 1 November, underlying earnings (EBITDA) grew 32% to £54 million, with adjusted profit before tax jumping 144% year-on-year to £22 million, as revenue increased 8% to £4.2 billion, with like-for-like revenue up 4%.
Trading during the first six weeks of the second half has been in line with board expectations.
7.32am: BP boss jumps
BP PLC (LSE:BP.) has announced that chief executive Murray Auchinloss is leaving with immediate effect, and that the boss of Aussie-listed Woodside Energy, Meg O'Neill, has been appointed. She will start in April.
Stepping into the CEO role on an interim basis is Carol Howle, BP's current supply, trading & shipping chief, with Auchinloss serving as an advisor until the end of next year.
O'Neill has been in charge of Woodside, where she oversaw the acquisition of BHP Petroleum, since 2021, after joining in 2018.
Before that she spent 23 years at ExxonMobil.
Chair Albert Manifold highlighted her "proven track record of driving transformation, growth, and disciplined capital allocation".
He said: "Following a comprehensive succession planning process, the board believes this transition creates an opportunity to accelerate our strategic vision to become a simpler, leaner, and more profitable company. Progress has been made in recent years, but increased rigor and diligence are required to make the necessary transformative changes to maximise value for our shareholders."
7.16am: Flat start for FTSE 100 predicted ahead of BoE cut
The FTSE 100 is set for a flat start on Thursday, ahead of a widely expected interest rate cut from the Bank of England later.
On the futures market, the London benchmark is predicted to rise by around one point, a day after 89.5 points were added to the index as it finished at 9,774.3.
Overnight, the US tech sector once again led a Wall Street stock retreat into the deep red, with the Nasdaq sliding 1.8% and the S&P 500 falling 1.2%, while the Dow Jones ended down 0.5%.
Oracle shares tumbled nearly 6%, weighed down by worries over funding tied to its artificial intelligence ambitions, spilling over to a 4% drop for Nvidia and Broadcom, while Alphabet slid over 3%.
Asian markets are mixed this morning, with Japan's Nikkei down 1%, the Hang Seng down 0.2%, but mainland Chinese and Indian stocks up slightly.