London Stocks Rise as Inflation Data Fuels Rate Cut Bets; Barclays Leads Gains

Post by : Saif Nasser

London’s stock market rose on Wednesday, marking the third straight day of gains, as investors bet that the Bank of England (BoE) may cut interest rates following new inflation data.

The FTSE 100, Britain’s main stock index, rose 0.9% to 9,547 points, while the FTSE 250, which tracks mid-sized companies, increased 1%. Investors welcomed news that inflation in September stayed at 3.8%, below the Bank of England’s expected 4%, signaling a possible slowdown in price growth.

Barclays was the top performer in the FTSE 100, climbing 4.2% after announcing a £500 million ($670 million) share buyback and raising its profitability target for the year. This helped boost the overall banking index by 1.6%.

Other major companies also gained. BP rose 1.4% and Shell added 1.2% as oil prices increased slightly. Rio Tinto, the mining giant, went up 2.1% after exploring a possible deal with Chinalco to reduce the Chinese investor’s 11% stake, which could allow the company to resume buybacks and strategic investments.

The market reaction reflected growing expectations that the Bank of England may cut interest rates to support the economy. Traders now see a 75% chance that the BoE will reduce the bank rate to 3.75% from 4% at its December meeting, up from 46% before the inflation data.

The lower inflation reading brings some relief ahead of the November budget by Finance Minister Rachel Reeves, as policymakers continue to manage the challenge of slow economic growth and sticky prices.

Analysts said the combination of strong corporate news like Barclays’ share buyback and positive macroeconomic signals has supported investor confidence, pushing London stocks higher.

Investors will continue to watch upcoming economic reports and BoE announcements, which will guide expectations for interest rates and market trends in the coming months.