FTSE 100 slips as Fed outlook and sector losses weigh

By 10:16 GMT the FTSE 100 fell 0.94% to 10,410.01 and the mid-cap FTSE 250 slipped 0.63% as market participants positioned ahead of the Bank of England’s rate announcement. Trading reflected cautious sentiment after the US Federal Reserve held interest rates on Wednesday while several policymakers signalled possible further tightening.

The Bank of England was widely expected to keep its base rate at 3.75% later in the day. Nine Federal Reserve policymakers indicated they expect at least one rate increase this year, a factor cited by investors when assessing interest-rate expectations.

Financial shares were among the largest drags. London Stock Exchange Group fell 3.5% after Rothschild Redburn downgraded the stock to neutral. Investment firm 3i Group declined 4.3%, adding to weakness in the sector.

Mining stocks weighed on the market as the precious metals mining sector lost about 5%. Fresnillo dropped 5.8% and Hochschild Mining fell 7%, amplifying losses across the FTSE indexes.

Retail and housing-related names also slipped. Tesco fell 2.2% after reporting slower first-quarter sales growth. Rate-sensitive homebuilders declined roughly 2.6% as a group, with Persimmon down 6.4% and the company the weakest performer on the FTSE 100 during the session.

Some companies posted gains. Testing and certification firm Intertek rose 1.5% after agreeing to be acquired by Swedish private equity firm EQT. Exhibitions group Informa increased 2.3% after updating its outlook and forecasting stronger growth in 2027.

Energy stocks traded lower as oil prices dropped to their lowest levels since the start of the Iran war. BP and Shell each fell about 1.5%, reflecting weaker crude prices.

Market moves reflected investors adjusting positions ahead of the Bank of England decision and reacting to US policy signals. Participants cited the combination of central bank guidance and company-specific news as drivers of trading during the session.