The FTSE 100 is expected to open broadly flat at 10,816.44 on Friday, after Thursday’s 1.2% rally, as investors digest a more hawkish Bank of England stance and another interest-rate increase from the Bank of Japan.
The Bank of England held Bank Rate at 3.75% by a 6–3 vote, but five of the six members who backed no change outlined circumstances in which they could support higher rates if inflation pressures persist.
Governor Andrew Bailey said policy may need to tighten if the Middle East conflict continues to push up energy prices, while Clare Lombardelli said the case for raising rates was building.
Sterling traded around $1.336 and €1.164 in early dealings.
In Japan, the Bank of Japan raised rates by 25 basis points to 1.25%, the highest level in more than 30 years, as policymakers responded to persistent inflation and weakness in the yen. The Nikkei rose 1.7% following the decision.
Elsewhere in Asia, China’s Shanghai Composite and Hong Kong’s Hang Seng both gained 0.9%.
Wall Street closed higher overnight, with the Dow Jones up 0.6%, the S&P 500 gaining 1.2% and the Nasdaq Composite rising 1.7%.
Gold traded around $4,374 an ounce, while Brent crude eased slightly to $103.54 a barrel.
Investors will now focus on UK retail sales data, alongside German producer prices, eurozone construction output and US industrial production.
