18th Sep 2026 06:56
(Alliance News) - Stocks in London are set to open marginally higher on Friday after the Bank of England held interest rates while signalling a more hawkish outlook, with investors also digesting the Bank of Japan's latest rate increase.
IG says futures indicate the FTSE 100 to open up 0.3 points, marginally higher, at 10,816.44 on Friday. The index of London large-caps closed up 1.2% at 10,816.14 on Thursday.
Sterling was quoted at USD1.3363 early Friday, marginally higher than USD1.3356 at the London equities close on Thursday. Against the euro, sterling rose to EUR1.1638 from EUR1.1627 a day prior.
On Thursday, the Bank of England's Monetary Policy Committee voted 6-3 to leave Bank Rate unchanged at 3.75%, repeating July's split, with Huw Pill, Megan Greene and Catherine Mann again favouring a 25 basis point increase.
However, the unchanged decision masked a more hawkish tone from the majority. Five of the six members who voted to hold rates outlined circumstances under which they could support tighter policy, citing the prolonged Middle East conflict and its impact on energy prices and the near-term inflation outlook.
Governor Andrew Bailey said "policy may have to tighten" if the conflict persists.
Sarah Breeden said a rate increase would be appropriate if "second-round effects crystallise", while Clare Lombardelli said the "case for raising bank rate is building". Dave Ramsden also said "there could be a case for increasing bank rate".
The euro traded at USD1.1482 early Friday, marginally higher than USD1.1480 late Thursday. Against the yen, the dollar was quoted at JPY157.11 versus JPY155.80.
In Asia on Friday, the Nikkei 225 index in Tokyo rose 1.7% after the Bank of Japan raised interest rates to 1.25%, the highest level in more than 30 years.
The widely expected 25 basis point increase was approved by a 7-2 vote as policymakers continued efforts to contain inflation fuelled by higher energy prices and a weak yen. The move follows recent policy tightening by both the European Central Bank and the US Federal Reserve.
In China, the Shanghai Composite rose 0.9%, while the Hang Seng index in Hong Kong added 0.9%. The S&P/ASX 200 in Sydney slipped 0.1%.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.7%.
Gold was quoted at USD4,374.25 an ounce early Friday, higher than USD4,356.36 on Thursday.
Brent oil was trading at USD103.54 a barrel early Friday, lower than USD103.65 late Thursday.
In Friday's corporate calendar, DXS International reports full-year results.
In the economic calendar on Friday, the UK releases retail sales data. Germany publishes producer prices, the eurozone reports construction output, and the US releases industrial production figures.
By Eva Castanedo, Alliance News senior economics reporter
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