FTSE 100 watch: Footsie deep in the red as BoE hikes rates

Rolls-Royce shares outperform even as group books Trent 1000 charge

FTSE 100 watch: Footsie deep in the red as BoE hikes rates

The UK benchmark index has fallen deep into the red in today’s session, pressured by ongoing trade worries and following the Bank of England’s (BoE) move to hike interest rates. Investors are also digesting a string of corporate releases, including Rolls-Royce Holdings’ (LON:RR) results, with shares in the British engine maker trading higher despite an extra charge over the Trent 1000 programme.

FTSE 100 deep in the red

As of 13:21 BST, the Footsie had given up 70.66 points to stand 0.92 percent lower at 7,582.25. Sentiment has been subdued today amid prospects for more US tariffs on China, and after the BoE announced that its Monetary Policy Committee had voted unanimously to raise the bank rate to 0.75 percent.

“The MPC continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal,” adding, however, that it judged that an increase of 0.25 percentage points was “warranted at this meeting”.

Reuters quoted Luke Bartholomew, an investment strategist at Aberdeen Standard Investments, as commenting that the economy had “done just about enough for the Bank of England to justify a hike today”.

“But no one should get too excited about this being a sign of things to come,” he continued, adding that it was “almost unthinkable that the Bank of England will follow up with further rate rises in the next few months given the risks on the horizon”.

Individual blue-chip movers

Rolls-Royce’s shares have added 4.02 percent to 1,027.50p, as the company said that it expects to deliver full-year profit and cash flow at the upper end of its guidance, despite booking an extra charge related to its Trent 1000 engine issues.

Barclays (LON:BARC) meanwhile is 2.20 percent down at 187.48p after reporting a drop in pre-tax profits for the first half of the year following a hefty settlement with the US Department of Justice in March.

The FTSE 100 was 0.94 percent down at 7,581.14 points as of 13:40 BST on Thursday, 02 August 2018.

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