During yesterday’s monetary policy meeting, the Bank of England reduced its benchmark interest rate by 25 basis points to 4.00%. Notably, four members of the Monetary Policy Committee voted against the cut, citing persistent inflationary pressures, while the majority decision passed by a narrow margin of just one vote. The accompanying statement reaffirmed the central bank’s commitment to returning inflation to the 2.0% target over the medium term, while keeping a close watch on any potential reacceleration in consumer prices.

Governor Andrew Bailey stressed during the press conference that borrowing costs should not be lowered “too quickly or too aggressively,” underscoring the delicate balance between supporting growth and maintaining price stability. At the same time, Bailey noted that there is credible evidence suggesting the current uptick in headline inflation is likely to be temporary.

Bond Market Reaction

The shift in policy prompted a measured response in UK gilts. Yields saw a modest uptick, with the 10-year rising to 4.549% from last week’s 4.512%. The 20-year yield climbed to 5.233% (previously 5.202%), while the 30-year edged higher to 5.355% from 5.324%. This suggests that while rate cuts generally put downward pressure on yields, investors are pricing in a cautious long-term inflation outlook.

Equity Movers

Corporate earnings season continues to drive individual stock performance within the FTSE 100. Notable gainers include:

  • InterContinental Hotels Group Plc. +5.78% — buoyed by strong Q2 revenue per available room (RevPAR) figures.
  • Coca Cola HBC AG. +4.16% — supported by better-than-expected earnings in emerging markets.
  • Rentokil Initial Plc. +2.99% — benefiting from resilient demand in hygiene and pest control services.
  • Halma Plc. +2.60% — gaining on robust order books in its safety equipment segment.

Among the session’s laggards:

  • Hikma Pharmaceuticals Plc. –7.11% — pressured by lower-than-expected sales guidance.
  • BAE Systems Plc. –5.36% — retreating after a strong multi-week rally.
  • BT Group Plc. –3.02% — underperforming on regulatory uncertainty in the UK telecoms sector.

Technical Outlook

On the daily chart, FTSE 100 remains in a localized correction, edging toward the upper boundary of an ascending channel (9300.0–9000.0). Technical indicators point to a strengthening bullish bias, with the Alligator indicator’s EMA lines widening and the Awesome Oscillator histogram maintaining bars above the zero line.

Resistance levels: 9190.0, 9420.0.
Support levels: 9010.0, 8760.0.

Technical Outlook

Trading Scenarios

Bullish case: A sustained break above 9190.0 could open the path toward 9420.0, with a protective stop at 9100.0. Timeframe: 7+ days.
Bearish case: A move below 9010.0 may trigger selling pressure toward 8670.0, with a stop at 9080.0.

Scenario Timeframe Recommendation Entry Take Profit Stop Loss Key Levels
Primary Weekly BUY STOP 9190.0 9420.0 9100.0 8760.0, 9010.0, 9190.0, 9420.0
Alternative Weekly SELL STOP 9010.0 8670.0 9080.0 8760.0, 9010.0, 9190.0, 9420.0