The FTSE 100 closed 0.44% higher at 10,697.57 on Monday, as investors looked ahead to this week’s Bank of England interest-rate decision while continuing to assess the inflationary impact of higher oil prices and Middle East tensions.
The more domestically focused FTSE 250 fell 0.59% to 23,834.48.
The Bank of England is widely expected to leave interest rates unchanged at 3.75% on Thursday, although markets are increasingly pricing the risk of further tightening as higher energy costs threaten to keep inflation elevated.
BofA Securities expects rates to remain unchanged through 2026, but said the possibility of a hike later this year or early next year had become more pronounced. Oxford Economics similarly warned that sustained high oil prices could force both the Bank of England and Federal Reserve to reconsider keeping rates on hold.
Investors face a busy UK economic calendar, with labour market figures on Tuesday, August inflation data on Wednesday, the Bank of England decision on Thursday and retail sales on Friday.
Among individual stocks, GSK gained 4.6%, making it one of the FTSE 100’s strongest performers after reporting positive results from two lung cancer studies.
The drugmaker said its Ris-Rez treatment reduced the risk of death by 54% in a Phase 3 small-cell lung cancer trial in China, while Jideytro achieved a 94% response rate in previously untreated patients with ROS1-positive non-small cell lung cancer.
Elsewhere, London’s Upper Tribunal upheld the Financial Conduct Authority’s lifetime ban on former hedge fund manager Crispin Odey, although his fine was reduced from £1.8 million to £1.5 million.
