Early market roundup: London stock prices lower ahead of BoE decision

Stock prices in London were lower on Thursday morning ahead of an interest rate decision by the Bank of England, with no change to the current rate expected, while the consensus is for two of the nine rate setters to vote for a rate hike.

The FTSE 100 index opened down 83.70 points, 0.8%, at 10,424.91. The FTSE 250 was down 99.34 points, 0.4%, at 23,268.04, and the AIM all-share was down 5.34 points, 0.7%, at 802.49.

The Cboe UK 100 was down 0.7% at 1,035.43, the Cboe UK 250 was down 0.5% at 19,950.30, and the Cboe small companies was down 0.2% at 18,440.64.

In European equities on Thursday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.1%.

UK labour market figures showed the unemployment rate stood at 4.9% in April, slightly better than economists’ expectations for a reading of 5.0%.

Wage growth, however, accelerated to 4.4% in the three months to April, ahead of the 4.0% forecast. Excluding bonuses, wage growth was unchanged at 3.4%, but still topped expectations of 3.2%.

Private sector earnings growth came in at 2.9%, in line with forecasts, though easing from 3.0% previously.

Economists at ING said: ‘On the face of it, the latest UK jobs report doesn’t look so bad. The unemployment rate ticked down to 4.9%. Payrolled employment rose after three consecutive monthly declines [it increased by a marginal 2,000 workers]. Average weekly earnings growth was higher than expected.

‘But the details still look dovish for the Bank of England. And the report is another reminder that the case for higher rates is far from the clear cut.

‘Take those payroll numbers. April’s atrocious 100,000 fall in employment has been cut in half, after revisions. That’s not a surprise; the latest reading is always prone to change – and usually in an upwards direction. But the newly revised April figure, showing a 53,000 drop in workers, is still pretty bad. The better May figure should be read in that context – and if you strip out government, private-sector payrolls still fell. ’

The pound was quoted at $1.3303 early Thursday, lower than $1.3393 at the London equities close on Wednesday. Against the euro, sterling slipped to €1.1549 from €1.1554.

The euro traded at $1.1514 early Thursday, down from $1.1591 late Wednesday. Against the yen, the dollar was quoted at JP¥160.60, up from JP¥160.25.

In politics, voters head to the polls in Makerfield on Thursday in what is being billed as one of the most consequential by-elections in recent British political history.

Andy Burnham is standing as Labour’s candidate in the Greater Manchester constituency in a bid to return to Parliament and challenge Prime Minister Keir Starmer’s leadership.

Starmer said on Wednesday he would be willing to offer Burnham a ‘big’ role in government should he win the seat. However, Burnham allies dismissed the suggestion, saying he was not interested in joining the administration and arguing that his political strength comes from being unassociated with what they described as the government’s failings.

Meanwhile, geopolitical tensions continued to ease after US President Donald Trump and Iran’s president signed an agreement intended to end the Middle East conflict.

Under the deal, Tehran has agreed to dilute its enriched uranium stockpile in exchange for significant economic relief.

Trump signed the memorandum of understanding during a dinner with French President Emmanuel Macron at the Palace of Versailles following the G7 summit, according to a US official cited by AFP.

‘Just signed it,’ Trump told reporters as he emerged from the palace. Iranian Foreign Ministry spokesperson Esmaeil Baqaei later confirmed to state news agency IRNA that the document ‘was finalised with the signatures of the presidents’.

Oil prices extended their retreat on the news. Brent crude was quoted at $78.17 a barrel early Thursday, down from $80.10 late Wednesday.

Back in London, the FTSE 100 was dragged lower by a cluster of stocks trading ex-dividend, including Persimmon, down 5.7%, Land Securities, down 4.4%, and 3i Group, down 3.8%.

Tesco fell 3.5% after reporting first-quarter sales of £16.83 billion, with like-for-like growth of 1.0%, supported by a 1.8% rise in UK sales and strong online demand.

The supermarket said customer satisfaction improved during the quarter and highlighted opportunities for Tesco Media from the upcoming World Cup.

Chief Executive Ken Murphy said: ‘With the conflict in the Middle East creating ongoing uncertainty for many households, we remain focused on giving customers the very best combination of price, quality and service.’

Tesco maintained guidance for financial 2027 adjusted operating profit of £3.0 billion to £3.3 billion and free cash flow of £1.5 billion to £2.0 billion. In financial 2026 it reported adjusted operating profit of £3.15 billion and free cash flow of £1.96 billion.

At the top of the FTSE 100, Informa rose 2.1% after reporting underlying revenue growth of 6.4% in the five months to May 31.

The company said performance was supported by continued strength in its Academic Markets and B2B Live Events divisions. More than $4 billion of revenue has already been traded, booked or is visible for the full year, and the group reiterated guidance for double-digit underlying adjusted earnings per share growth in 2026.

Informa also expects further strong adjusted EPS growth in 2027, supported by a full schedule of annual and biennial events and the restaging of deferred launches. More than $600 million of first-half 2027 revenue has already been booked or confirmed.

On the FTSE 250, Hochschild Mining fell 4.2% after Berenberg cut its price target on the stock to 570 pence from 590p and maintained a ’hold’ recommendation.

The mid-cap index was also weighed down by several stocks trading ex-dividend.

In Asia on Thursday, the Nikkei 225 in Tokyo closed up 1.7%. In China, the Shanghai Composite ended down 0.4%, while the Hang Seng index in Hong Kong fell 2.1%. The S&P/ASX 200 in Sydney closed down 0.6%.

In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.0%, the S&P 500 down 1.2% and the Nasdaq Composite down 1.3%.

The yield on the US 10-year Treasury was quoted at 4.45% unchanged from Wednesday. The yield on the US 30-year Treasury was quoted at 4.90%, narrowing from 4.92%.

Gold was quoted at $4,307.90 an ounce early Thursday, down from $4,356.32 on Wednesday.

Still to come on Thursday’s economic calendar are eurozone current account and construction output figures, alongside the Swiss National Bank’s interest rate decision.

In the US, investors will monitor weekly jobless claims, the Philadelphia Fed manufacturing index, the Conference Board leading index and EIA natural gas stocks data.

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