London open: FTSE surges ahead of expected BoE hike
By Michele Maatouk
Date: Thursday 05 Nov 2026
(Sharecast News) - London stocks shot higher in early trade on Thursday, taking their cue from strong gains on Wall Street, as investors sifted through an avalanche of corporate news and eyed the Bank of England's first rate hike in more than three years.
At 0830 GMT, the FTSE 100 was up 1% at 10,932.91, hitting a three-month high, while Brent crude was up 0.4% at $95.04 a barrel and West Texas Intermediate was 0.3% lower at $87.89.
The BoE is widely expected to lifted interest rates by 25 basis points to 4%.
Susannah Streeter, chief investment strategist at Wealth Club, said: "'A release valve has been unscrewed following the Democratic success of the mid-terms, with pent-up concerns about an escalation of the war in the Middle East evaporating.
"Oil prices remain sharply lower, amid hopes that Trump will refrain from ordering fresh strikes on Iran and that ongoing negotiations will bear fruit. The Footsie is on the front foot again in early trade, amid hopes that inflationary pressures on global economies will ease if some kind of resolution to the Middle East conflict is found. The tech-lite nature of the index is also added protection, and is drawing interest, as investors look for more defensive assets while AI jitters continue."
Streeter said sterling is also enjoying a "significant" resurgence, hitting its highest level since the Brexit referendum on a trade-weighted basis. "Slightly stronger-than-expected growth, expectations that the Bank of England will raise interest rates today, and signs of a rapprochement with Europe are all helping to bolster the currency," she said.
As far as the BoE is concerned, Streeter said that with inflation worries still swirling and energy prices still around a third higher than before the Middle East conflict began, financial markets are still pricing in a rate hike.
"Economic growth has been more buoyant than expected, and the latest snapshot of manufacturing activity surprised on the upside," she said. "Inflation is running hot, and is set to get steamier, with companies expected to pass on higher costs as higher consumer prices. So despite this latest relief cascading through energy markets, the economic damage of an eight-month conflict in the Middle East has already been done.
"Policymakers won't want inflation to become embedded in the economy. So, they are acting now to try and dampen down demand, by making borrowing more expensive, which is set to act as a drag on spending and investment, make employers more reticent about taking on more staff, and keep wage growth in check."
In equity markets, BT Group surged as it raised its interim dividend and maintained full-year guidance as it reported higher revenues and profits for the first half, alongside a reduction in its pension deficit.
Diageo shares fizzed higher after the drinks giant reiterated its full-year outlook despite ongoing softness in North America. Updating on trading, the owner of Guinness and Smirnoff said first-quarter net sales rose 1.2%, or 1.4% on an organic basis, to $4.93bn, with volumes up 1.1% and the price/mix 0.3%.
All regions showed organic growth during the period, apart from North America, Diageo's biggest market, where sales fell 3.6%. But the blue chip insisted trading was line with expectations, and left its full-year outlook unchanged.
Croda gained as it reported a 6.6% jump in third-quarter sales, pointing to an exceptionally strong performance in Beauty and good sales growth in the pharma segment.
Next edged up as third-quarter sales at the fashion and homeware retailer beat expectations, driven by the international operations, although UK growth was volatile after the hot summer weather that deterred shoppers from venturing out.
Morgan Advanced Materials was the top performer on the FTSE 250 after it said full-year profit was set to be around the upper end of expectations.
Morgan Sindall and RS Group also rose after an update and results, respectively.
On the downside, Auto Trader fell after results, while defence firms BAE Systems and Babcock lost ground again, having slumped on Wednesday amid expectations the Democrats' sweeping victory in the US midterms would lead to lower defence spending.
Ithaca, Shell and BP all gushed lower as oil prices eased, while Ashmore tumbled as it traded without entitlement to the dividend.
Market Movers
FTSE 100 (UKX) 10,932.91 0.96%
FTSE 250 (MCX) 25,101.53 0.75%
techMARK (TASX) 6,337.54 0.19%
FTSE 100 - Risers
BT Group (BT.A) 244.40p 5.18%
Diageo (DGE) 1,895.50p 4.91%
Fresnillo (FRES) 2,546.00p 3.84%
Croda International (CRDA) 3,738.00p 3.21%
Rio Tinto (RIO) 6,381.00p 3.11%
Antofagasta (ANTO) 3,353.00p 3.05%
Airtel Africa (AAF) 288.00p 3.02%
Anglo American (AAL) 3,903.00p 2.97%
Melrose Industries (MRO) 488.80p 2.97%
JD Sports Fashion (JD.) 99.80p 2.85%
FTSE 100 - Fallers
BAE Systems (BA.) 1,914.50p -3.17%
Autotrader Group (AUTO) 563.60p -2.87%
Ithaca Energy (ITH) 249.70p -2.87%
Shell (SHEL) 3,722.00p -1.94%
BP (BP.) 561.00p -1.52%
Babcock International Group (BAB) 1,025.00p -0.96%
Computacenter (CCC) 4,718.00p -0.91%
easyJet (EZJ) 687.00p -0.23%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 98.64p 0.00%
DCC Energy (DCC) 6,450.00p 0.00%
FTSE 250 - Risers
Morgan Advanced Materials (MGAM) 278.00p 7.92%
Morgan Sindall Group (MGNS) 4,462.00p 6.71%
RS Group (RS1) 796.00p 6.18%
Endeavour Mining (EDV) 3,992.00p 5.64%
OSB Group (OSB) 522.75p 5.19%
Pan African Resources (PAF) 116.20p 5.06%
Frasers Group (FRAS) 961.50p 4.23%
Hochschild Mining (HOC) 481.40p 4.07%
Kier Group (KIE) 322.60p 4.06%
BlackRock World Mining Trust (BRWM) 901.00p 3.68%
FTSE 250 - Fallers
Ashmore Group (ASHM) 219.00p -4.45%
Schroder Oriental Income Fund Ltd. (SOI) 407.00p -4.35%
Partners Group Private Equity Limited. (EUR) (PEY) 6.62p -3.78%
EnQuest (ENQ) 26.65p -3.59%
Hansa Investment Company Limited (DI) (HAN) 332.00p -3.49%
Harbour Energy (HBR) 272.80p -2.29%
Pacific Horizon Inv Trust (PHI) 949.00p -2.16%
Polar Capital Technology Trust (PCT) 570.50p -1.89%
Raspberry PI Holdings (RPI) 508.75p -1.88%
Allianz Technology Trust (ATT) 636.00p -1.85%
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