31st Oct 2025 17:14
(Alliance News) - Stock prices in London closed mostly lower on Friday, after positive news for European trade with China and hawkish comments by a US Federal Reserve officer.
Meanwhile in the UK, softer inflation data means the Bank of England's interest rate call on Thursday next week is more finely balanced than previously thought. A hold is broadly expected, but the vote is expected to be close, and a quarter-point cut is far from ruled out.
With 'dovish' Monetary Policy Committee members Swati Dhingra and Alan Taylor expected to vote for a cut, the outcome will likely depend on the decisions of BoE Governor Andrew Bailey, Deputy Governor Sarah Breedon and Dave Ramsden. The BoE's dilemma follows a downside surprise in September inflation data, cooling pay growth, a weakening labour market and lacklustre economic growth. In addition, reports suggest Chancellor Rachel Reeves may opt to remove VAT on electricity bills in November's budget, adding to downward pressure on inflation.
The FTSE 100 index closed down 42.81 points, 0.4%, at 9,717.25. The FTSE 250 ended down 105.31 points, 0.5%, at 22,170.97, and the AIM All-Share closed up 2.58 points, 0.3%, at 772.38.
The Cboe UK 100 was down 0.4% at 969.84, the Cboe UK 250 was 0.6% lower at 19,256.82, and the Cboe Small Companies was up 0.1% at 17,908.94.
On the FTSE 250, Raspberry Pi ended up 0.4%, after announcing that Chief Financial Officer Richard Boult will step down from his role in the second half of 2026 to "explore new challenges," with a formal search for his successor now underway.
The Cambridge, England-based maker of personal-use computers and modules said Boult will assist in the recruitment process to ensure an orderly succession.
Among smaller caps, Coral Products climbed 14% after posting a swing to an annual profit.
The Manchester, England-based maker of bespoke plastic products said it swung to a pretax profit of GBP216,000 in the financial year ended April 30, from a loss of GBP1.2 million a year prior. Revenue fell 3.7% to GBP29.8 million from GBP31.0 million.
Chair Joe Grimmond said after a "disappointing" first half, the company "took decisive action by appointing a largely new executive team with a clear focus on strengthening our operational fundamentals."
Crimson Tide gained 12%.
The Kent, England-based software developer said it continues to see evidence of the impact of its new strategy, which is designed to result in sustainable growth.
At the annual general meeting, Chair Chris Fielding said Crimson Tide's performance "remains in line with the board's expectations of re-establishing the foundations for growth in future years". Cash on October 29 amounted to GBP1.3 million, which the firm expects to largely maintain for the rest of the financial year.
Versarien lost 28%, after the Gloucestershire-based advanced materials group said it has inked a non-binding heads of terms with an unnamed UK PLC regarding the disposal of its remaining assets.
The consideration for the assets would be GBP100,000 in cash and around GBP100,000 in shares in the potential acquirer. Versarien said both parties have entered into a period of exclusivity until the end of November.
In European equities on Friday, the CAC 40 in Paris closed down 0.5%, while the DAX 40 in Frankfurt ended down 0.8%.
The EU commissioner for trade has said China's one-year suspension on its restrictions on rare earth materials would apply to the bloc as well as the US.
"My understanding is that the agreement, which was found between the US and China in this matter, is 'erga omnes', so we should apply it to all and, of course, including the EU," Maros Sefcovic told reporters in Rome.
Following discussions with the US, China on Thursday said it would suspend certain export restrictions for one year, including on rare earth materials, that had been announced in October.
The pound was quoted at USD1.3135 at the time of the London equities close on Friday, lower compared to USD1.3149 Thursday. The euro stood at USD1.1536, down against USD1.1565. Against the yen, the dollar was trading lower at JPY154.06, compared to JPY154.11.
Stocks in New York were higher at around the time of the London close. The Dow Jones Industrial Average was up 20.15 points, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.7%.
Kansas City Fed President Jeff Schmid was one of two people who dissented at the US Fed's vote on Wednesday, at which the US central bank backed a quarter percentage-point cut to bring interest rates to between 3.75% and 4.00%. The other dissenter was Governor Stephen Miran, who wanted a larger cut.
"The labour market is largely in balance, the economy shows continued momentum, and inflation remains too high," Schmid said in a statement.
"I view the stance of policy as only modestly restrictive," he added. "In this context, I judged it appropriate to maintain the policy rate at this week's meeting."
In other US news, G7 countries will have to use "non-market" tactics to curb China's dominance in rare earth production, US Energy Secretary Chris Wright said, calling the effort a "strategic necessity."
"China, frankly, just used non-market practices to squish the rest of the world out of manufacturing those products, so it got strategic leverage. Everybody sees that now," he told reporters.
"We need to establish our own ability to mine, process, refine, and create the products that come out of rare earth elements," Wright said. "We're going to have to intervene and use some non-market forces."
The yield on the US 10-year Treasury was quoted unchanged at 4.09%. The yield on the US 30-year Treasury was quoted at 4.66%, widening from 4.64%.
Brent oil was quoted lower at USD64.45 a barrel at the time of the London equities close on Friday, from USD64.92 late Thursday.
Gold was quoted lower at USD3,982.25 an ounce against USD3,998.00.
The biggest risers on the FTSE 100 were Smith & Nephew, up 38.00p at 1,405.00p, Metlen Energy & Metals, up 0.90p at 44.15p, BT, up 2.35p at 185.75p, Babcock International, up 13.00p at 1,213.00p, and Haleon, up 3.30p at 354.10p.
The biggest fallers on the FTSE 100 were WPP, down 15.00p at 287.50p, Auto Trader, down 28.40p at 780.40p, Burberry, down 42.50p at 1,237.50p, Beazley, down 22.17p at 924.83p, and Intercontinental Hotels, down 216.00p at 9,192.00p.
On Monday's economic calendar, there are manufacturing purchasing managers' index reports from the eurozone, the US, the UK and others.
On Monday's UK corporate calendar, Ryanair releases its half-year results.
By Emma Curzon, Alliance News reporter
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