London equities opened higher on Thursday as investors welcomed the Federal Reserve sticking to its three rate-cut stance for 2024, while they switched focus to the Bank of England’s monetary policy update.
The internationally-focussed FTSE 100 was up 1.1% as of 0818 GMT, its highest since May 2023.
The domestically oriented FTSE 250 also advanced 0.9%.
The Fed kept borrowing costs unchanged on Wednesday and projected as many as three interest rate cuts this year, soothing investors’ nerves about high interest rates and sending US stocks to close higher.
Most sectoral indexes traded in the green, with rate-sensitive real estate investment trusts and precious metal miners among the top boosts, up 1.6% and 3.3% respectively.
Focus now pivots to the BoE’s interest rate verdict, due at 1200 GMT, where it is widely expected to hold rates at 5.25%, a day after data showed inflation fell to its lowest in almost two-and-a-half years.
FTSE 100 dips in run-up to Fed verdict; UK inflation softens
Traders are pricing in around 70 basis points of rate cuts from the central bank this year. The pound steadied ahead of the decision.
Among stocks, M&G added 3.5% after the British insurer and asset manager reported profit ahead of analyst forecasts for 2023.
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