Source: Sharecast
The FTSE 100 was 0.4% higher at 8,597.14 and sterling was up 0.2% against the dollar at 1.3323, having popped higher after the announcement.
The BoE cut interest rates by 25 basis points to 2.25%. At its meeting on 7 May, the Monetary Policy Committee voted 5-4 for the cut, with two members opting for a 50 basis points cut and two preferring to stand pat.
The BoE said in a statement: "Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate. The Committee will continue to monitor closely the risks of inflation persistence and what the evidence may reveal about the balance between aggregate supply and demand in the economy.
"Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further. The Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting."
Looking ahead to the rest of the day, investors were expecting an announcement on a US-UK trade deal after Donald Trump posted on his Truth Social site that an "agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come".
He added: "Because of our long time history and allegiance together, it is a great honour to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!"
Russ Mould, investment director at AJ Bell, said: "It’s hoped that the agreement will lower tariffs imposed on certain UK goods sold into the US, but nothing is certain with Trump until we get the full details.
"A trade deal between the two countries could provide more certainty for UK businesses as to how the future will look, so they can plan accordingly. It might also put the UK in a more favourable light with foreign investors looking to dial down US exposure and wondering where they should reallocate money."
Market participants were also mulling the latest data from Halifax, which showed that house prices rose in April for the first time since January.
House prices ticked up 0.3% on the month following a 0.5% decline in March and a 0.2% drop in February. On the year, house prices rose 3.2% in April following 2.9% and 2.8% growth in March and February, respectively.
The average price of a property stood at £297,781 last month, compared to £296,899 in March.
Amanda Bryden, head of mortgages at Halifax, said: "We know the stamp duty changes prompted a surge in transactions in the early part of this year, as buyers rushed to beat the tax-rise deadline. However, this didn't lead to a significant increase in property prices, with the last six months characterised by a stability in prices rarely seen since the pandemic. While the market has cooled slightly since this rush, buyer activity remains strong in comparison to recent years.
"Mortgage rates have continued to fall, with most lenders now offering rates below 4%. Coupled with positive earnings growth that has outpaced broader inflation, these factors have helped to steadily improve affordability for many buyers.
"Overall, the market continues to show resilience despite a subdued economic environment and risks from geopolitical developments. There is likely to be a bump-up in consumer price inflation as household bills increase, but with further base rate cuts also expected, we anticipate a similar trend of modest price growth this year."
In equity markets, IMI was the standout performer on the FTSE 010 as the engineering firm reaffirmed its guidance for the full year.
Weir Group advanced after an upgrade to ‘buy’ from ‘neutral’ at UBS, which hiked the price target to 2,850p from 2,250p.
Renishaw surged as it narrowed its full-year revenue and profit guidance and said it was entering the final quarter of the year with "good momentum".
Fashion and homeware retailer Next nudged up as it lifted annual profit guidance after reporting forecast-busting first-quarter sales, citing warmer weather which boosted purchases of summer clothing, but held annual estimates of flat revenues.
InterContinental Hotels gained after saying it was on track to meet full-year consensus profit estimates, despite softer economic indicators and the impact of US tariffs and immigration policies.
Harbour Energy surged as it lifted its production outlook a day after announcing plans to cut 250 jobs in Aberdeen.
Airtel Africa slid after it posted a drop in full-year underlying earnings.
Centrica slumped as the British Gas owner cautioned that its residential energy business has been impacted by warmer than usual weather in the second quarter.
Shares in gaming and gambling giant Flutter Entertainment were under pressure after adverse US sports results weighed on first-quarter numbers.
Playtech tumbled as it traded without entitlement to the dividend.
Market Movers
FTSE 100 (UKX) 8,597.14 0.44%
FTSE 250 (MCX) 20,572.75 1.16%
techMARK (TASX) 4,643.93 0.95%
FTSE 100 - Risers
IMI (IMI) 1,895.00p 5.69%
Mondi (MNDI) 1,154.50p 4.01%
Melrose Industries (MRO) 464.90p 3.91%
Weir Group (WEIR) 2,400.00p 3.90%
Intermediate Capital Group (ICG) 1,999.00p 3.84%
Whitbread (WTB) 2,842.00p 3.72%
Smurfit Westrock (DI) (SWR) 3,111.00p 3.67%
JD Sports Fashion (JD.) 85.98p 3.64%
Spirax Group (SPX) 6,200.00p 3.59%
InterContinental Hotels Group (IHG) 8,872.00p 3.07%
FTSE 100 - Fallers
Airtel Africa (AAF) 158.10p -7.16%
Centrica (CNA) 148.40p -6.73%
Fresnillo (FRES) 1,025.00p -2.75%
Vodafone Group (VOD) 69.82p -2.46%
AstraZeneca (AZN) 10,288.00p -2.06%
Rio Tinto (RIO) 4,457.50p -1.81%
BT Group (BT.A) 163.80p -1.59%
Severn Trent (SVT) 2,720.00p -1.41%
Flutter Entertainment (DI) (FLTR) 18,145.00p -0.77%
Imperial Brands (IMB) 3,131.00p -0.76%
FTSE 250 - Risers
Renishaw (RSW) 2,635.00p 15.32%
Aston Martin Lagonda Global Holdings (AML) 78.50p 12.14%
Harbour Energy (HBR) 172.30p 9.68%
Grafton Group Ut (CDI) (GFTU) 993.90p 6.50%
Spectris (SXS) 2,104.00p 5.09%
Ithaca Energy (ITH) 136.10p 4.85%
Pagegroup (PAGE) 274.20p 4.02%
Hays (HAS) 73.10p 3.98%
Burberry Group (BRBY) 763.60p 3.95%
Kier Group (KIE) 161.60p 3.72%
FTSE 250 - Fallers
Playtech (PTEC) 319.50p -60.06%
TBC Bank Group (TBCG) 4,370.00p -10.08%
Petershill Partners (PHLL) 215.00p -2.49%
Trainline (TRN) 263.00p -2.16%
Hochschild Mining (HOC) 287.60p -1.91%
Patria Private Equity Trust (PPET) 565.00p -1.74%
Clarkson (CKN) 3,195.00p -1.69%
GCP Infrastructure Investments Ltd (GCP) 72.70p -1.62%
Empiric Student Property (ESP) 91.20p -1.62%
Raspberry PI Holdings (RPI) 476.40p -1.49%