UK stock markets closed lower on Friday, easing back after a record-breaking October rally as investors adopted a more cautious stance ahead of the Bank of England’s monetary policy decision and the Government’s Budget next month.
The FTSE 100 slipped 0.4%, while the FTSE 250 fell 0.5%, though both indexes posted monthly gains, with the blue-chip benchmark repeatedly hitting record highs during October and the mid-cap index trading near four-year peaks.
Pharmaceuticals, financials, and mining stocks were among the top-performing sectors over the month, buoyed by strong quarterly earnings from heavyweights including HSBC and GSK.
Investor sentiment was also supported by subdued inflation data, which strengthened expectations that the Bank of England could cut interest rates later this year. Globally, easing US–China trade tensions and a dovish Federal Reserve have added to the risk-on tone seen throughout October.
According to LSEG data, markets largely expect the BoE to hold rates steady in November, but are pricing in a cut in December.
Fiona Cincotta, senior market analyst at City Index, said:
“A more dovish-sounding Bank of England, particularly in light of the upcoming Budget and potential tax increases, could be favourable for the FTSE.”
Despite the day’s losses, analysts said the FTSE 100 remains well-positioned, supported by resilient corporate earnings and improving global sentiment heading into the final months of the year.
