5th Nov 2026 12:21
(Alliance News) - European equities moved higher on Thursday afternoon, while the pound was on the up after the Bank of England enacted its first rate hike in over three years, and with a more hawkish bias than expected.
The pound was quoted at USD1.3471 early Thursday afternoon, higher than USD1.3464 at the London equities close on Wednesday and up from USD1.3454 moments before the BoE decision. Against the euro, sterling edged up to EUR1.2002 from EUR1.1999 a day earlier. It was at EUR1.1983 before the decision.
The FTSE 100 index traded up 70.69 points, 0.7%, at 10,899.90, slightly off its session high in the wake of the BoE hike. The FTSE 250 was up 155.01 points, 0.6%, at 25,070.70, also off its best level for the day. The AIM All-Share was up 9.15 points, 1.2%, at 770.04.
The Cboe UK 100 was up 0.6% at 1,081.67, the Cboe UK 250 was 0.7% higher at 22,194.27, and the Cboe small companies rose 0.2% to 18,864.93.
The BoE unsurprisingly decided on a 25 basis point hike, taking bank rate to 4.00% from 3.75%.
But the decision was more hawkish than expected. A vote split of 7-2 was expected, with two of the rate-setting Monetary Policy Committee's more dovish members predicted by some to vote against the hike.
However, eight voted in favour of the quarter-point lift. The lone dissenter was Catherine Mann, who pushed for a chunkier 50 basis point hike.
Governor Andrew Bailey commented: "In view of the news, the case is clear for a 25-basis point rise now. Without news which softens the risks to inflationary pressures, I can see the argument for a further increase in rates and thereafter taking a more conditional approach, dependent on the evidence on energy prices and inflation dynamics. Recognising that some of the upward slope in the curve is explained by risk premia and not expected rates, the current level of restrictiveness is broadly appropriate."
In European equities on Thursday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt added 0.8%, trading around a record high.
The euro faded slightly to USD1.1218 on Thursday from USD1.1222 late Wednesday. Against the yen, the dollar fell to JPY158.40 from JPY158.45.
In New York, the Dow Jones Industrial Average is called up 0.6%, the S&P 500 up 0.2% but the Nasdaq Composite down 0.5% as the dust settles on the US midterm elections, which delivered a bruising defeat for Donald Trump's Republicans.
Trump conceded on Wednesday that rising fuel prices caused by the Iran war were one reason for the defeat of Republicans in the midterm elections, but defended his decision to attack Iran.
Trump told journalists in Washington that he agreed with the assessment of his Vice President JD Vance, who had described the war as the reason for the election defeat.
At the same time, he defended his decision to go to war with Iran, saying if he were faced with the same choice again, he would act the same way. He said Iran must not be allowed to obtain a nuclear weapon. Asked whether the war had been worth it, he answered yes.
He also argued that public discontent was about "the price, not the war," while admitting that the war had pushed gas prices up "a little, short term."
Trump has also insisted his party would have won the elections if he had himself been on the ballot and said the enthusiasm of his supporters at campaign rallies had not transferred to the Republican candidates.
The yield on the US 10-year Treasury was quoted at 4.88% midday Thursday, narrowing from 4.92% on Wednesday. The yield on the US 30-year Treasury was at 5.27%, narrowing from 5.31%.
Deutsche Bank analysts commented: "When it came to the market reaction, there was relief among investors that the results weren't disputed, which helped to reduce political uncertainty. Moreover, the prospect of divided government also eased concerns about the fiscal trajectory, given it'll now be more difficult to pass tax cuts or spending packages. That helped to bring down Treasury yields, which in turn offered further support to risk assets."
Brent oil traded at USD96.06 a barrel early Thursday afternoon, down from USD99.00 late Wednesday, as investors continued to assess developments in the Middle East.
Gold was quoted at USD4,132.67 an ounce midday Thursday, higher than USD4,041.83 on Wednesday.
On the FTSE 100, BAE Systems continued to slide, declining 4.8% with the defence sector seen as a loser amid the blue wave in Congress.
BT rose 3.7%. It delivered second quarter results ahead of expectations while it outlined the potential for shareholder returns after striking a new pension agreement.
The telecommunications firm said pretax profit rose 12% to GBP1.07 billion in the half year ended September 30 from GBP956 million the year prior.
Revenue edged up to GBP8.75 billion from GBP8.70 billion.
For the second quarter alone, adjusted service revenue edged down to GBP3.84 billion from GBP3.86 billion. Adjusted earnings before interest, tax, depreciation and amortisation rose 2.5% to GBP2.08 billion from GBP2.03 billion.
Analysts at Berenberg said BT's service revenue was 1% ahead of consensus for the quarter, while revenue and Ebitda were both 3% ahead due to beats at Consumer and Openreach.
Diageo added 2.7%. It reiterated full-year guidance as it reported a stronger-than-expected quarter as a decline in sales in North America proved less than feared.
The London-based brewer and distiller, which owns brands including Guinness stout and Johnnie Walker whisky, said net sales grew 1.2% to USD4.93 billion in the quarter ended September 30 from USD4.88 billion the year prior.
Organic sales growth was 1.4% but this was partly offset by unfavourable foreign exchange and the impact of disposals.
Revenue beat Visible Alpha consensus of USD4.84 billion and organic growth confounded expectations for a 0.4% decline.
It continues to expect broadly flat organic net sales growth and low-to mid-single-digit organic operating profit growth.
RS Group was among the best performing FTSE 250 constituents, adding 5.5%.
The industrial and electronics products distributor said half-year earnings improved and it reported "trading momentum remains encouraging".
Hikma Pharmaceuticals fell 6.4% as it cut the top end of profit guidance. The bottom end was lifted, however.
It expects operating profit for 2026 in the range of USD740 million to USD760 million. Its previous guidance was in the range of USD720 million to USD770 million.
Still to come on Thursday is the latest US initial jobless claims reading at 1330 GMT.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.
Related Shares:
BAE SystemsBTHikma PharmaceuticalsDiageo