British stock indexes fell as investors awaited this evening’s highly anticipated yet uncertain Federal Reserve decision on interest rates.
The blue-chip FTSE 100 was down 0.3%, while the FTSE 250 declined 0.2%. On Tuesday, both closed at their highest levels since early September.
Consumer price index inflation remained unchanged at 2.2% in August, but exporters faced pressure as the pound strengthened following a rise in services inflation—an important figure for the Bank of England.
Globally, investors are focused on the Federal Reserve, which is expected to announce an interest rate cut later, though the extent of the reduction remains unclear.
Expectations for a larger-than-usual 50-basis-point cut—equivalent to half a percentage point—have surged to 68% in money markets, up from around 18% a week ago.
Deutsche Bank analyst Jim Reid noted, “You’d have to go back over 15 years to find such an uncertain situation this close to the decision. A lot of money will be made and lost today.”
In the FTSE 350, industrial miners dropped 0.8% as metal prices eased ahead of the Fed’s decision.
In corporate news, Reckitt Benckiser rose as much as 3.3%, leading the FTSE 100 after reports indicated the company has initiated early discussions with potential buyers for its homecare assets.
