FTSE 100 ticks up in caution ahead of BoE rate decision

 London shares edged higher on Wednesday as the index steadied following the previous session’s pullback, though gains were capped due to caution ahead of Thursday’s Bank of England policy decision. 

The modest uptick followed Tuesday’s decline, which had snapped the FTSE 100’s longest winning streak since August. Sentiment found baseline support from an overnight stabilization across global semiconductor equities after strong earnings from chipmaker AMD, helping offset broader market uncertainty as investors parsed early gains by Democrats in the U.S. midterm elections.

Marks & Spencer’s shares fell 1.74% despite delivering a sharp recovery in half-year profitability. The British retail bellwether posted an adjusted profit before tax of £403.2 million for the six months ended September 26, more than doubling from £184.1 million in the prior-year period and beating the consensus analyst estimate of £399 million. 

Despite the earnings beat, traders moved to take profits following the stock’s recent outperformance, tracking a cautious mood across domestic high-street names after peer Associated British Foods warned on Tuesday of ongoing margin headwinds in its Primark fashion unit.

Broader risk appetite remained restrained as dealing desks positioned for the Bank of England’s Monetary Policy Committee announcement on Thursday.

Money markets continue to price in an 80% probability that the BoE will deliver a 25-basis-point interest-rate increase, lifting Bank Rate to 4% to keep persistent service-sector inflation and elevated energy costs in check.

With Chancellor John Healey’s autumn fiscal plans maintaining a disciplined spending buffer, allocators are watching closely to see whether Governor Andrew Bailey and the MPC signal that Thursday’s anticipated hike will mark the terminal peak of the current tightening cycle.