By Ragini Mathur and Twesha Dikshit
(Reuters) -London’s main stock indexes advanced on Thursday after the Bank of England’s quarter-point interest rate cut, while news of an impending trade deal between the U.S. and Britain further boosted investor sentiment.
By 1156 GMT, the blue-chip FTSE 100 was up 0.2%, while the domestically focused midcap index climbed 1.1%.
The Bank of England trimmed its main interest rate by 0.25 percentage points to 4.25%, despite an unexpected three-way split among policymakers as Trump’s tariffs weigh on global economic growth.
“They (policymakers) have also pointed out that there is a lot of uncertainty ahead, but by cutting rates, what they want to do is release pressure on businesses, stimulate demand in the economy and shine the light towards a recovery,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
Adding to the day’s developments, the United States and Britain will announce a deal to lower tariffs on some goods, marking the first such agreement since U.S. President Donald Trump’s tariffs sparked a global trade war.
In posts on Truth Social, Trump said he would hold an Oval Office news conference at 1400 GMT on Thursday about a “full and comprehensive” trade agreement with Britain.
The deal is likely to be narrow, with Britain securing lower tariffs on cars and steel, the two sectors hardest hit.
Shares of luxury car company Aston Martin climbed 11.4%, ranking among the top gainers on the midcap index.
On the blue-chip index, IMI emerged as the top performer, gaining 5.4%, after the specialist engineering company reaffirmed the financial year 2025 outlook.
InterContinental Hotels Group rose 2.5% after the Holiday Inn owner said it is on track to meet the full-year consensus profit estimate.
Renishaw jumped 16% to the top of the midcap index after the engineering firm said it will shut down loss-making drug delivery operations and introduce a surcharge to pass on additional costs brought on by U.S. tariffs.
(Reporting by Ragini Mathur and Twesha Dikshit in Bengaluru; Editing by Vijay Kishore)
