The FTSE 100 closed higher on Thursday, boosted by a strong performance from BT and JD Sports, as investors digested the latest interest rate decision from the Bank of England later today.
Governor Andrew Bailey increased interest rates by 50bps to a post-financial crisis high of four per cent earlier today.
Investors think the Bank is nearing the end of its once in a generation rate hike cycle, betting that borrowing costs will peak at under 4.5 per cent.
London’s premier index closed up 0.8 per cent at 7,820.16 following the rate hike. The domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, closed 3.6 per cent higher at 20,614.69.
JD Sports performed best on the FTSE 100, closing 11 per cent higher, after it outlined plans to open up to 350 stores globally over the next five years.
CEO Regis Schultz said the expansion – which will see capital expenditure between £500m and £600m per year – marked “a new, distinct chapter in the growth story of JD as we set our plans to become the leading global sports-fashion powerhouse.”
BT’s stock recovered to end 6.6 per cent higher, having traded more than two per cent lower this morning.
The telecoms firm is aggressively targeting expansion of its high-speed internet capabilities. CEO Philip Jansen said “on full fibre, we’re building – and now connecting – like fury”.
Shell fell 1.1 per cent despite capping off a record year with bumper profits in the fourth quarter.
The oil giant also announced a fresh share buyback programme of £3.2bn ($4bn).
The pound fell nearly one per cent against the dollar to trade at 1.2253, despite the Bank’s rate hike, after the Monetary Policy Committee dropped its commitment to “respond (as) forcefully, as necessary” to inflation.