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FTSE 100 LIVE: Stocks rise as Bank of England cuts interest rates and ECB set to hold
A deep dive into what's moving markets and happening across the global economy
LaToya Harding·
Business Reporter, Yahoo Finance UK
Updated
Thu 18 December 2025 at 9:09 am GMT-5
2 min read
In this article:
The FTSE 100 (^FTSE) and European stocks recovered some ground on Thursday, after a muted start, as traders digested the Bank of England's (BoE) interest rate decision and awaited an announcement from the European Central Bank (ECB).
The Monetary Policy Committee (MPC) cut UK interest rates from 4% to 3.75% as widely expected, as households face rising unemployment and declining inflation. This has taken borrowing costs down to their lowest level since January 2023.
Read more: Interest rates cut to lowest level in nearly three years
It came as money markets indicated a 97.5% chance of a quarter-point rate cut, and only a 2.5% possibility that rates were left at 4%. The City now also believes that Threadneedle Street will cut interest rates to 3.5% by April, with a 78% chance of a cut to 3.25% by November next year.
Meanwhile, the ECB is widely expected to keep its deposit rate at 2% this afternoon, where it has been since June. On Wednesday, Isabel Schnabel, a member of the executive board of the ECB, said she was “rather comfortable” with expectations that the next move would be an increase.
Jim Reid of Deutsche Bank said: “So talk about a hike has risen up the agenda, and on Wednesday last week, pricing for a 2026 hike moved as high as 50% on an intraday basis."
“For now, however, our European economists interpret the recent data and ECB commentary as consistent with an extension of the current pause.”
Elsewhere, the US will report on inflation last month with economists forecasting that the report will show prices for American consumers continued to rise faster than the Federal Reserve’s 2% target.
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London’s benchmark index (^FTSE) was 0.3% higher in early afternoon trade.
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Germany's DAX (^GDAXI) was also 0.3% up and the CAC (^FCHI) in Paris likewise headed 0.3% into the green.
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The pan-European STOXX 600 (^STOXX) advanced 0.4%.
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Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green.
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The pound was 0.2% down against the US dollar (GBPUSD=X) at 1.3352, having fallen as much as 0.8% on Wednesday after inflation dropped further than expected to 3.2%.
Follow along for live updates throughout the day:
LIVE
17 updates
- 14 mins ago LaToya Harding
Eurozone interest rates unchanged
The European Central Bank (ECB) held interest rates steady on Thursday at 2.15%, capping off the year as anticipated with unchanged guidance for bank borrowing costs. The bank last cut rates at its May meeting.
The deposit facility rate — the interest rate banks receive for making overnight deposits with the ECB — also remained at 2%.
The bloc also raised its growth forecasts from what it set out in September. Growth is expected to be "driven especially by domestic demand," it said.
Growth has been revised up to 1.4% in 2025, 1.2% in 2026 and 1.4% in 2027 and is expected to remain at 1.4% in 2028.
- 34 mins ago LaToya Harding
Bitcoin price slides as crash fears grow
Bloomberg Intelligence senior commodity strategist Mike McGlone linked bitcoin’s (BTC-USD) recent weakness to what he describes as “post-inflation deflation,” pointing to the asset’s performance following recent Federal Reserve easing.
“Since the Fed cut 25 basis points on September 17, bitcoin (BTC-USD) has dropped almost 25%. Is it the start of post-inflation deflation or just a dip in the uptrend? My bias is the former," McGlone wrote on X.
Cryptocurrency markets are ending the year caught between resilience and fragility, as investors digest a Federal Reserve policy stance that delivered a rate cut but retained a cautious tone. The latest Federal Open Market Committee (FOMC) decision has been characterised by analysts as a hawkish-tilted cut with a dovish undertone, aimed at supporting the labour market while maintaining pressure on inflation.
Policymakers have emphasised that future decisions will remain data dependent, particularly given distortions in recent economic releases linked to shutdown effects and lagging indicators.
The Fed’s dot plot now suggests a median policy rate of around 3.25% to 3.5% at the next meeting, while projections for 2026 appear flatter than markets had expected. Futures markets are currently pricing roughly 2.3 rate cuts over the coming year.
Despite some regulatory progress, analysts warn that crypto markets remain exposed to structural risks.
“Crypto remains caught in the macro crosscurrents,” QCP Capital analysts said. “Beyond a lack of near-term catalysts, a new structural risk is emerging. MSCI is reviewing the index eligibility of digital-asset treasury companies, with potential exclusions for firms holding more than 50% exposure to crypto. If enacted, passive outflows could reach up to $2.8bn, adding pressure to an already fragile market.”
- 56 mins ago LaToya Harding
Waterstones owner looks to list on stock market
The owner of Waterstones and Barnes & Noble is reportedly preparing to list the booksellers on the stock market.
Elliott Investment Management, the hedge fund that owns the most popular bookstores in the US and the UK, has spoken to potential advisers about an initial public offering (IPO), the Financial Times reported.
The multibillion-pound group is thought to prefer London over New York for the listing, which could be a welcome boost to the UK stock market.
While initial talks are under way, no final decisions have been made and the plans could change.
The company’s financial year ends in April, which makes an IPO unlikely until after the summer at the earliest, the FT reported, citing unnamed sources close to the matter. However, it is believed that Elliott could appoint investment bankers early next year.
- Today at 12:59 PM UTC LaToya Harding
Reeves says ‘more to do to help families’
Rachel Reeves said on Thursday she had “more to do to help families with the cost of living” after the Bank of England cut interest rates to 3.75%.
The chancellor said:
Meanwhile, the shadow chancellor Sir Mel Stride said:
- Today at 12:37 PM UTC LaToya Harding
UK inflation to fall 'more quickly'
UK inflation is expected to fall "more quickly" in the near term, the Bank of England said on Thursday. It comes as CPI inflation has fallen since the previous gathering in November, to 3.2%.
The Bank said:
It now predicts that inflation will rise temporarily this month, thanks to an increase in tobacco duty and a pickup in airfares price inflation.
However, it is then expected to fall to around 3% in the first quarter of 2026.
- Today at 12:14 PM UTC LaToya Harding
BoE policymakers split over rate cut
Policymakers at the Bank of England were split by five votes to four as they lowered interest rates today.
Governor Andrew Bailey tipped the balance among members of the Monetary Policy Committee (MPC) in favour of reducing borrowing costs.
He said:
Here are more details from the minutes:
- Today at 12:01 PM UTC LaToya Harding
BREAKING: Bank of England cuts interest rates
The Bank of England has cut interest rates to 3.75% from 4%, taking borrowing costs to their lowest level in almost three years.
The move follows signs of strain in the UK economy, with unemployment rising to a four-year high of 5.1% and private sector wage growth falling to its weakest pace since November 2020 in the three months to October. Official data published on Wednesday also showed inflation easing more sharply than expected, dropping from 3.6% to 3.2% in November.
The cut brings interest rates down to the lowest level since the beginning of February 2023.
Victor Trokoudes, founder and chief executive of smart money app Plum, said the decision would be welcomed by borrowers, as it was likely to translate into cheaper loans and lower monthly payments for households on variable or tracker mortgages, while those on fixed deals would see no immediate change.
He added that remortgagers could also benefit, noting that mortgage rates had already edged lower ahead of the Bank’s decision and that housing affordability was expected to improve in 2026. He pointed to the average two year 75% LTV fixed mortgage rate, which fell to 4.06% in November from 4.2% in October.
Trokoudes warned that savers were likely to face lower returns and should be prepared to shop around, as variable savings rates were expected to be cut following the base rate move. He said smaller banks, building societies and fintech providers were often quicker than major high street lenders to offer more competitive savings rates, including on cash ISAs.
- Today at 11:55 AM UTC LaToya Harding
Number of dairy farmers plunges to record low
The number of dairy farms in Britain has fallen to a record low, raising concerns about food security, the Telegraph has reported
New figures from the Agriculture and Horticulture Development Board (AHDB) show just 7,010 milk producers were left in the UK last year after 190 farms went out of business.
It marks a steep decline from the 8,720 in operation in 2019, when AHDB first started collecting data, and is 85pc lower than the 46,000 milk producers operating in 1980.
The National Farmers’ Union (NFU) has warned that the alarming figures indicate the industry is approaching a “crunch point” at which the remaining dairy farmers can no longer keep up with demand.
UK farms produce 12 billion litres of milk a year, supplying around nine in 10 British adults who report regularly consuming the product.
However, farmers have warned that relying on fewer farms for production could pose supply risks.
Since 2021, milk production on individual dairy farms has risen by 15pc, according to AHDB, meaning production is concentrated at a dwindling number of sites.
Paul Tomkins, the chairman of the NFU dairy board, said: “This trajectory cannot continue; otherwise, we’ll end up with one dairy farm producing billions of litres of milk a year.
“We will see a drop in production that cannot be picked up by others, and then questions will come about supply chains, and it will be almost too late to actually remedy the situation.”
- Today at 11:33 AM UTC LaToya Harding
Lululemon rises as Elliott Investment Management builds $1bn stake
Athleisure company Lululemon's stock jumped more than 5% in premarket on Thursday following reports by the Wall Street Journal and Reuters that activist investor Elliott Investment Management has built a stake of over $1bn in the brand.
The reports said that the company is preparing to line up a new CEO candidate, citing sources. Elliott has been working closely with Jane Nielsen, former CFO and COO at Ralph Lauren and sees her as a potential CEO, they said.
As of the close on Wednesday, the company's stock was 45% lower for the year-to-date following a period of slowing sales.
Growth in North America has been a particular sticking point for the brand, which has felt the pressure of tariffs as well as hot competition from the likes of Nike (NKE) and others.
The stock has rallied recently, rising about 11% since Friday when the athletic-wear maker boosted its full-year outlook and announced that McDonald would depart.
The Vancouver-based company’s growth has slowed in recent quarters and that trend is expected to continue, according to analyst estimates. Sales growth is near the lowest level since the company went public in 2007 as Lululemon faces fierce competition from upstarts including Alo Yoga and Vuori, as well as knockoffs from lower-priced retailers.
- Today at 11:10 AM UTC LaToya Harding
AI tech and gaming boosts Currys
AI technology and gaming launches have helped drive higher sales for electronics retailer Currys, which also hailed a recovery of its Nordics arm.
The company said its financial performance was improving despite a “muted” consumer environment and “unhelpful” cost pressures.
It reported revenues totalling £4.2bn for the six months to November, up 4% when compared like-for-like with the same period last year. Adjusted pre-tax profits more than doubled to £22m year-on-year.
In the UK and Ireland, where Currys has almost 300 shops, computing was the strongest category for sales with AI technology and new games leading the charge.
It also highlighted surging demand for smaller categories like gaming accessories, emerging technology like health and beauty innovations, and a 12% jump in the sale of Windows laptops.
Mobile products sold well over the half-year, with its mobile network brand iD increasing its share of the wider market, the firm said.
But it reported a dip in the sale of consumer electronics, including TVs and speakers, which the retailer attributed to there being a spike in demand last year during the men’s Euro 2024 football tournament.
Chief executive Alex Baldock said it was “pleasing that strong top-line growth is translating into improved profitability”. He added:
Currys said profits in the UK were being weighed down by increases to the national minimum wage and employer national insurance contributions, from last year’s autumn budget.
These cost increases were not being fully offset by savings it has been striving to make across the business.
Nevertheless, Currys hailed an improved performance for its Nordics arm after launching a turnaround for the struggling business. Revenues increased by 4% on a like-for-like basis for the region, which has more than 400 stores both owned and franchised, and earnings grew.
Shares in Currys jumped by about a tenth in early trading on Thursday.
- Today at 10:48 AM UTC LaToya Harding
Norway also leaves rates on hold
The Norges Bank’s Monetary and Financial Stability Committee has also left Norway’s policy rate unchanged at 4% today, after Sweden likewise held rates steady.
They warned that the outlook remained uncertain, but hinted that rates could be reduced further in the year ahead.
Ida Wolden Bache, Norges Bank governor, said:
Meanwhile, Taiwan’s central bank has taken the same decision, leaving its benchmark interest rate unchanged at 2％
- Today at 10:27 AM UTC LaToya Harding
BP names new boss as CEO exit
BP (BP.L) has appointed a new chief executive, making Meg O'Neill the first woman to run a major global oil firm. It comes as current boss Murray Auchincloss is stepping down less than two years after replacing Bernard Looney.
O'Neill currently runs Australian oil and gas firm Woodside Energy, and said she looks forward to helping BP "do our part to meet the world's energy needs".
She is expected to push on with BP’s drive to cut costs and reduce debt through asset sales, as it reverses away from its strategy to become a green energy giant.
Derren Nathan, head of equity research at Hargreaves Lansdown, said:
- Today at 10:09 AM UTC LaToya Harding
FTSE risers and fallers
Here are the top risers and fallers to the FTSE 100 this morning:
- Today at 9:44 AM UTC LaToya Harding
Sweden central bank keeps rates on hold
In a busy day for central banks today, with announcements from the Bank of England, and the European Central Bank, we also have just had a decision from the Sweden.
The Riksbank kept borrowing costs on hold at a three-year low, with a warning that borrowing costs would remain at their current level “for some time to come”. It said it planned to make no changes until 2027.
Interest rates remained at 1.75% as officials said inflation was approaching 2% just as the prospects for the Swedish economy “are looking brighter”.
- Today at 9:26 AM UTC LaToya Harding
Bank of England to cut interest rates at noon
The Bank of England (BoE) is widely expected to cut UK interest rates at noon today, down from 4% to 3.75%, as households face rising unemployment and declining inflation.
This would take borrowing costs down to their lowest level since January 2023.
The money markets indicate there is a 97.5% chance of a quarter-point rate cut, and only a 2.5% possibility that rates are left at 4%.
The City also believes Threadneedle Street will cut interest rates to 3.5% by April, with a 78% chance of a cut to 3.25% by November next year.
Kallum Pickering, chief economist at Peel Hunt, said he would not be surprised if some members of the Monetary Policy Committee backed a larger half-a-point rate cut today after the sharp changes in Britain’s economic backdrop.
He warned policymakers risked being “late to the game” if they did not back a rapid lowering of borrowing costs to combat the weakening of the jobs market.
- Today at 9:02 AM UTC LaToya Harding
Asia and US overnight
Asian shares mostly slipped further overnight after declines for AI stocks dragged the US market to its worst day in nearly a month.
The Nikkei (^N225) fell 1% on the day in Japan, with technology shares leading the decline, and in South Korea the Kospi (^KS11) lost 1.5% on the day, also pulled lower by selling of shares in electronics companies and carmakers.
Technology and telecoms giant SoftBank sank 4%, computer chip maker Tokyo Electron lost 3.2% while chip testing equipment maker Advantest dropped 3.3%. Honda also declined 2.2% after reports said it was suspending production at some plants in Japan and China due to shortages of computer chips.
LG declined 3.1%, while Samsung lost 0.3%.
However, the Hang Seng (^HSI) managed to gain 0.1% in Hong Kong and the Shanghai Composite (000001.SS) crept 0.2% up by the end of the session.
Across the pond on Wall Street, the S&P 500 (^GSPC) fell 1.2%, and the tech-heavy Nasdaq (^IXIC) was 1.8% lower after renewed fears about a bubble in artificial intelligence (AI) triggered a slump in tech stocks. The Dow Jones (^DJI) also lost 0.5%.
Later on Thursday, the US will report on inflation last month. Economists expect that report to show prices for American consumers continue to rise faster than the Federal Reserve’s 2% target.
- Today at 8:35 AM UTC LaToya Harding
Coming up
Good morning, and welcome back to our markets live blog. As usual, we will be taking a deep dive into what's moving markets and happening across the global economy.
To the day ahead the highlights are the European Central Bank (ECB) and Bank of England (BoE) policy decisions. Over in the US, we’ll also get the CPI report for November, and the weekly initial jobless claims.
Here's a quick look at what's on the agenda for today:
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7am: Trading updates: Curry’s
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8.30am: Sweden interest rate decision
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9am: Norway interest rate decision 9am
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12pm: Bank of England interest rate decision
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1.15pm: European Central Bank interest rate decision
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1.30pm: US inflation report for November
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1.45pm: European Central Bank press conference
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