FTSE 100 slides as Fed outlook and sector losses weigh on markets

Britain's main stock indexes moved lower on Thursday, weighed down by losses in financial and materials stocks as investors awaited the Bank of England's interest rate decision and continued to assess the US Federal Reserve's policy outlook.

The Bank of England is widely expected to leave interest rates unchanged at 3.75% later in the day.

The anticipated decision comes after the US Federal Reserve maintained interest rates on Wednesday.

However, concerns about inflation remained in focus after nine Federal Reserve policymakers indicated that they expect at least one rate increase this year.

FTSE 100 and FTSE 250 trade lower

By 10:16 GMT, the benchmark FTSE 100 index had fallen 0.94% to 10,410.01 points.

The mid-cap FTSE 250 index was also lower, slipping 0.63%.

Market sentiment remained cautious as investors weighed the implications of central bank policy decisions on economic growth and corporate performance.

Financial stocks under pressure

Financial shares were among the biggest drags on the market.

London Stock Exchange Group fell 3.5% after Rothschild Redburn downgraded the stock to "neutral".

The downgrade weighed on investor sentiment toward the exchange operator.

Investment firm 3i Group also posted notable losses, declining 4.3% during the session.

The weakness in financial stocks contributed significantly to the broader market decline.

Precious metal miners lead sectoral losses

Mining stocks were among the worst-performing sectors of the day.

The precious metals mining sector fell 5%, leading to losses across the market.

Fresnillo dropped 5.8%, while Hochschild Mining declined 7%.

The sharp declines in mining shares added further pressure to the FTSE indexes as investors moved away from the sector.

Tesco falls after sales growth slows

Shares of Tesco, the UK's largest food retailer, slipped 2.2% after the company reported a slowdown in first-quarter sales growth.

The update prompted a negative market reaction, with investors closely monitoring consumer demand trends and retail performance.

Homebuilders retreat ahead of rate decision

Rate-sensitive homebuilding stocks also came under pressure ahead of the Bank of England's announcement.

The sector declined 2.6%, reflecting investor caution around borrowing costs and housing market conditions.

Persimmon was the weakest performer on the FTSE 100, falling 6.4%.

The decline underscored concerns about the impact of interest rate expectations on the housing sector.

Intertek and Informa buck the trend

Despite the broader market weakness, a handful of stocks recorded gains.

Intertek rose 1.5% after the testing and certification company agreed to a takeover by Swedish private equity firm EQT.

Meanwhile, Informa emerged as the top-performing stock on the FTSE 100, gaining 2.3%.

The exhibitions group advanced after forecasting stronger growth in 2027, providing investors with a more optimistic outlook for its business.

Energy majors decline as oil prices ease

Oil and gas stocks also traded lower.

BP and Shell both fell 1.5% as oil prices dropped to their lowest levels since the start of the Iran war.

The decline in crude prices weighed on energy shares and added to the broader weakness across the UK equity market.

Overall, UK stocks remained under pressure as investors positioned themselves ahead of the Bank of England's policy announcement while continuing to evaluate signals from the Federal Reserve regarding the future path of interest rates.