London midday: Stocks extend losses as BoE cuts rates
By Michele Maatouk
Date: Thursday 07 Aug 2025
(Sharecast News) - London stocks had extended losses just after midday on Thursday after the Bank of England cut interest rates by 25 basis points to 4.0%, as expected.
The FTSE 100 was down 0.7% at 9,100.44, falling further into the red. Meanwhile, sterling picked against the dollar, trading 0.5% higher at 1.3420.
The Monetary Policy Committee voted 5-4 to cut the rate. Andrew Bailey, Sarah Breeden, Swati Dhingra and Dave Ramsden voted in favour of the 25 basis rate cut, while Megan Greene, Clare Lombardelli, Catherine L Mann and Huw Pill opted for the rate to remain unchanged.
Alan Taylor initially voted for a cut to 3.75% but in order to secure a majority decision, a second round of voting was held and the Committee was asked to vote on either a 25bp cut or for the rate to remain at 4.25%. Taylor then voted for the quarter-point cut.
The Bank also revised up its forecast for inflation, saying it now expects consumer price inflation to peak at 4.0% in September - having previously forecast a peak of 3.7% - before falling back thereafter towards the 2% target.
"There has been substantial disinflation over the past two and a half years, following previous external shocks, supported by the restrictive stance of monetary policy," the BoE said. "That progress has allowed for reductions in Bank Rate over the past year. The Committee remains focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2% target in the medium term."
Jake Finney, senior economist at PwC, said the voting split among committee members shows how finely balanced the decision was, but the direction of travel is still clear.
"We anticipate one or two additional cuts this year, most likely in November and December, as the Bank proceeds with its cautious easing cycle that its forward guidance states will be 'gradual and careful'," he said.
"The devil, as ever, is in the detail. The statement that 'monetary policy is not on a pre-set path' underscores the Bank's data-dependent stance and signals that future rate cuts cannot be taken for granted. This caution is understandable given the Bank's own forecasts show inflation could rise to 4% in September, double the 2% target.
"Alongside the rate decision, the Bank made modest adjustments to its forecasts. It acknowledged that inflation has proven marginally stickier than anticipated, but the labour market has loosened more quickly, with wage growth declining further. Crucially, the medium-term outlook for the UK remains broadly unchanged. That matters because it's the medium-term picture that will shape the Chancellor's choices ahead of the Autumn Budget."
Elsewhere, figures released earlier by Halifax showed that house prices rose in July at the fastest monthly pace since the start of the year.
In equity markets, Hikma Pharmaceuticals tumbled after reporting a 7% drop in first-half core operating profit and cutting the outlook for the operating margin in its injectables segment.
Defence stocks Babcock and BAE Systems slumped after German defence firm Rheinmetall's second-quarter results fell short of estimates.
WPP fell sharply as the advertising agency reported a slump in half-year earnings as clients spent less and the use of artificial intelligence hit the bottom line. Operating profit fell 48% to £221m on the back of a 7.8% decline in revenue to £6.6bn.
Morgan Advanced Materials fell as it warned that full-year adjusted operating profit was set to be around the bottom of the consensus range due to weak market conditions, mix effects and foreign exchange headwinds.
AstraZeneca, BT and Segro lost ground as they traded without entitlement to the dividend.
On the upside, CRH was the standout gainer on the FTSE 100 as it lifted its financial guidance for 2025, noting that underlying demand in its key end-use markets remains positive.
InterContinental Hotels rallied as it posted a 34.1% jump in first-half pre-tax profit and said it remains on track to meet full-year consensus profit and earnings expectations.
Flutter Entertainment gained following well-received results from US sports betting firm DraftKings.
Harbour Energy surged as it narrowed upwards production guidance, unveiled a $100m share buyback and reported a jump in half-year adjusted earnings.
Serco pushed higher as the government contractor held updated guidance, posted a rise in half-year earnings and unveiled a £50m share buyback.
Market Movers
FTSE 100 (UKX) 9,100.44 -0.70%
FTSE 250 (MCX) 21,943.26 0.08%
techMARK (TASX) 5,252.13 -0.72%
FTSE 100 - Risers
CRH (CDI) (CRH) 7,918.00p 7.64%
InterContinental Hotels Group (IHG) 9,258.00p 6.66%
Flutter Entertainment (DI) (FLTR) 23,510.00p 3.02%
Halma (HLMA) 3,300.00p 2.10%
Coca-Cola HBC AG (CDI) (CCH) 3,722.00p 1.92%
Smith & Nephew (SN.) 1,358.00p 1.53%
Antofagasta (ANTO) 1,995.50p 1.42%
Spirax Group (SPX) 6,150.00p 1.40%
easyJet (EZJ) 500.60p 1.38%
Rentokil Initial (RTO) 365.90p 1.27%
FTSE 100 - Fallers
Hikma Pharmaceuticals (HIK) 1,774.00p -5.84%
BAE Systems (BA.) 1,765.50p -4.98%
Babcock International Group (BAB) 958.50p -4.72%
BT Group (BT.A) 204.80p -3.44%
Hiscox Limited (DI) (HSX) 1,333.00p -3.34%
Vodafone Group (VOD) 83.02p -2.83%
St James's Place (STJ) 1,312.50p -2.78%
WPP (WPP) 391.00p -2.76%
Glencore (GLEN) 277.35p -2.60%
NATWEST GROUP (NWG) 512.60p -2.47%
FTSE 250 - Risers
Harbour Energy (HBR) 230.60p 12.93%
Serco Group (SRP) 223.20p 6.59%
Ocado Group (OCDO) 366.70p 4.65%
Future (FUTR) 733.50p 3.16%
RS Group (RS1) 564.50p 2.73%
Wizz Air Holdings (WIZZ) 1,364.00p 2.48%
TP Icap Group (TCAP) 288.50p 2.30%
Bridgepoint Group (Reg S) (BPT) 339.60p 2.29%
Raspberry PI Holdings (RPI) 411.70p 2.16%
Pagegroup (PAGE) 272.60p 2.10%
FTSE 250 - Fallers
Morgan Advanced Materials (MGAM) 194.40p -13.79%
Chemring Group (CHG) 529.00p -3.99%
QinetiQ Group (QQ.) 487.20p -3.24%
Man Group (EMG) 160.70p -3.13%
SSP Group (SSPG) 163.60p -3.08%
Oxford Nanopore Technologies (ONT) 208.00p -2.80%
Pennon Group (PNN) 494.60p -2.45%
Drax Group (DRX) 689.00p -2.41%
Worldwide Healthcare Trust (WWH) 308.50p -2.37%
Telecom Plus (TEP) 1,886.00p -2.08%
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