London midday: FTSE extends gains as BoE stands pat on rates

17th Sep 2026 12:17

(Sharecast News) - London stocks had extended gains by midday on Thursday after the Bank of England stood pat on interest rates, as expected.

The FTSE 100 was up 0.6% at 10,756.84, while Brent crude was down 2.2% at $103.54 a barrel and West Texas Intermediate was 1.7% lower at $100.66.

The Bank of England held interest rates at 3.75%, for the sixth meeting in a row. The Monetary Policy Committee voted by a majority of 6-3 to keep rates on hold, with the three dissenters - Megan Greene, Catherine Mann and Huw Pill - favouring a 25 basis points hike.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Inflation is the fever central bankers want to bring down, but the Bank of England is holding off administering the bitter medicine of an interest rate hike. The UK economy is fragile, and already feeling the chill of sluggish growth and a cooling jobs market, and for now this should offset the risks of steamy energy costs being passed easily through to hotter consumer prices. With shoppers worried about rising borrowing costs and bracing for higher bills to land, they may be less likely to spend if price tags become more expensive.

"However, the longer the war with Iran continues to rage and keeps crude and gas prices elevated, the greater the chances of a hike later this year and next, especially if data shows consumer price inflation continues to rise. Already three members around the table wanted to hike rates immediately to 4%, and they may well be joined by more if the chronic energy crunch continues. So, a hike on November 5th still looks like a distinct possibility if the bonfires of inflation intensify.

"The US is a more robust patient, with the spending might of AI hyperscalers pulsing through the veins of the economy, supporting strong job creation, which is why the Fed moved to douse down inflation by hiking rates yesterday."

On Wednesday, the Federal Reserve lifted interest rates by 25 basis points as expected to between 3.75% and 4.00%. This marked the first hike since 2023 and the decision was unanimously approved with a 12-0 vote.

In equity markets, clothing and homeware retailer Next was a touch firmer, off earlier highs after it lifted its full-year profit guidance by £12m to £1.25bn but also cut its UK sales growth forecast to 2% from 2.8% for the second half.

Bytes Technology surged as it upped its FY27 outlook following a better-than-expected performance in the first half of the year.

Man Group was boosted by an upgrade to 'buy' from 'neutral' at UBS, which increased its price target to 365p from 335p, pointing to a solid performance from AHL, the company's suite of trend-following funds.

Galliford Try shot up as it announced the launch of a £15m share buyback and hailed a strong full-year performance, with profit ahead of market expectations.

Drax nudged higher as it said full-year adjusted EBITDA was set to be around the top of the range of consensus estimates of £680m to £711m.