5th Feb 2026 12:16
(Alliance News) - Stock prices in London were lower at midday on Thursday, but the FTSE 100 pared its loss after the Bank of England voted to hold interest rates at 3.75% in a split decision.
The Monetary Policy Committee voted by a majority of 5-4 to maintain the Bank Rate. Four members voted to reduce the rate by 0.25 percentage points to 3.5%.
The central bank said CPI inflation is expected to fall back to around the 2% target from April, due to developments in energy prices including from the 2025 government budget.
"Reflecting the impact of monetary policy, and consistent with evidence of subdued economic growth and building slack in the labour market, pay growth and services price inflation have generally continued to ease. The risk from greater inflation persistence has continued to become less pronounced, while some risks to inflation from weaker demand and a loosening labour market remain," the Bank of England said.
Governor Andrew Bailey, Megan Greene, Clare Lombardelli, Catherine Mann and Huw Pill voted to maintain the rate, while Sarah Breeden, Swati Dhingra, Dave Ramsden and Alan Taylor preferred a 0.25 point reduction.
"On the basis of the current evidence, Bank Rate is likely to be reduced further. Judgements around further policy easing will become a closer call. The extent and timing of further easing in monetary policy will depend on the evolution of the outlook for inflation," the Bank of England said.
Sterling was at USD1.3564 early on Thursday afternoon, down from USD1.3656 at the London equities close on Wednesday.
The FTSE 100 index was down 16.36 points, 0.2%, at 10,385.98. The FTSE 250 was down 162.55 points, 0.7% at 23,170.60, and the AIM all-share was down 3.71 points, 0.5%, at 810.64.
The Cboe UK 100 was down 0.3% at 1,036.80, the Cboe UK 250 was 1.1% lower at 20,521.51, and the Cboe small companies was up 0.1% at 18,664.52.
In European equities on Thursday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was down 0.1%.
The euro was slightly lower at USD1.1792 from USD1.1798. Against the yen, the dollar was higher at JPY157.14 versus JPY156.69.
"The FTSE 100 dipped on decision day for the Bank of England as ripples from the Anthropic-driven sell-off continue to be felt," said AJ Bell analyst Dan Coatsworth.
Meanwhile, the political futures of UK Prime Minister Keir Starmer and his chief of staff are secure, a Cabinet minister has insisted despite growing pressure from Labour MPs furious about the Peter Mandelson scandal, PA reported.
Keir Starmer has apologised to the victims of Jeffrey Epstein, saying he is "sorry for having believed Mandelson's lies and appointed him" British ambassador to Washington.
The UK prime minister insisted that "none of us knew the depth of the darkness" of Peter Mandelson's relationship with the convicted sex offender.
Speaking at an event in East Sussex, on Thursday, Starmer addressed the scandal at the start of a speech as he faces growing pressure from Labour MPs furious about his decision to hand the peer the top diplomatic job.
"It has been publicly known for some time that Mandelson knew Epstein, but none of us knew the depth of the darkness of that relationship," Starmer said.
Starmer said Mandelson was "asked directly" about the nature of his relationship with the paedophile, whether he had stayed with Epstein after his conviction, and whether he had accepted gifts from the financier.
Steve Reed on Thursday argued Starmer was not "at fault" because the disgraced peer "was taken at his word" about his links to paedophile Jeffrey Epstein before his appointment as UK ambassador to the US.
Many blame the prime minister's chief of staff Morgan McSweeney for handing his ally Mandelson the top diplomatic job in Washington despite knowing about his dealings to Epstein continued after his conviction for child sex offences.
One Labour MP, speaking to the Press Association anonymously, said McSweeney "needs to go, he's a total liability and like Mandelson is only interested in himself".
The MP added: "I think the PM doesn't have much time left and sadly, he has nobody but himself to blame."
Stocks in New York were called mixed with only small moves. The Dow Jones Industrial Average was called marginally lower, the S&P 500 index up slightly, and the Nasdaq Composite marginally higher.
The yield on the US 10-year Treasury was quoted at 4.28% at midday on Thursday, unchanged from Wednesday's close. The yield on the US 30-year Treasury was unchanged at 4.92%.
In London, shares in Fresnillo were down 3.1% after Berenberg cut its rating on the miner to 'hold' from 'buy'.
Shell shares were 1.0% lower after it left its buyback unchanged but reported weaker earnings than forecast due to reduced oil prices and a softer contribution from its marketing business.
The London-based oil major reported adjusted earnings of USD3.26 billion in the fourth quarter, down 11% from USD3.66 billion a year ago, and below USD3.51 billion company compiled consensus.
Adjusted earnings before interest, tax, depreciation and amortisation for the quarter fell 10% to USD12.80 billion from USD14.28 billion a year prior.
Shell said the lower earnings reflected lower Marketing margins, lower realised prices and higher operating expenses.
Shell raised its fourth quarter dividend and kept the pace of quarterly buybacks unchanged at USD3.5 billion from the prior quarter, despite some analysts forecasting a cut.
Shell said the buyback programme will be completed before the first quarter results announcement.
It increased the fourth quarter dividend by 3.9% to 37.2 US cents per share, from 35.8 US cents.
Anglo American shares fell 1.3% as it said its annual copper and iron ore production met its estimates, describing performance as "strong".
The London-based diversified miner said copper production fell 10% to 695,000 tonnes in 2025 from 773,000 in 2024, coming in at the bottom end of Anglo's prior guidance of between 690,000 tonnes and 750,000. Copper output for the fourth quarter of 2025 declined 14% to 170,000 tonnes from 198,000 a year earlier.
Anglo American expects copper production to rise to between 700,000 tonnes and 760,000 in 2026, up to between 750,000 tonnes and 810,000 in 2027, and up to between 790,000 tonnes and 850,000 in 2028.
Shares in Ithaca Energy were up 5.4% on the FTSE 250 index after it said it had begun the new year with higher production capacity, and confirmed plans to pay out GBP500 million to investors for 2025.
The London-based oil and gas company estimated it made USD2.0 billion in adjusted earnings before interest, tax, depreciation, amortisation and exploration expense in 2025, up from USD1.4 billion in 2024.
Daily production averaged 119,000 barrels of oil equivalent in 2025, up from 80,000 barrels the previous year. This was at the lower end of annual guidance, which Ithaca had revised up to range from 119,000 to 125,000 barrels of oil equivalent per day.
On the AIM market, shares in Tern jumped 22%.
The internet-of-things focused investor said investee Device Authority, in which it holds a 25% stake, won a new original equipment manufacturer customer and the expansion of an existing tier one automotive deployment.
Gold was lower at USD4,873.90 an ounce at midday on Thursday from USD4,916.04 late Wednesday.
Brent oil was trading higher at USD68.59 a barrel on Thursday from USD67.41 on Wednesday.
Still to come on Thursday's economic calendar is the ECB rate decision at 1315 GMT and US trade balance and jobless figures.
By Michael Hennessey, Alliance News reporter
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