UK100 Constructive as Bank of England Stands Pat
UK100 Analysis
Inflation in the UK fell to 2% y/y in the UK as Wednesday's data showed, but that was not enough to force the central bank into a cut, while the upcoming July 4 general elections were a deterrent. Policymakers kept rates at 5.25% for seventh straight time as the still expect inflation to pick up in the second half and not fall below the 2% target for another two years [1]. The services components is sticky while wages remain historically elevated. At the same time, the troubled economy exited its brief recession and better days are ahead.
Despite staying on the sidelines, officials have pointed to a less restrictive stance ahead, as price pressures have abated. Two officials again voted in favor of a cut, while the decision to hold was "finely balanced" for some members.
UK100 is having a great run this year that culminated in May's all-time highs. Election uncertainty and BoE apprehension leads to a losing month though. This creates risk for deeper correction towards 8,041, although further weakness does not look easy under current conditions.
However, today's outcome keeps the BoE on track to cut in August and the end of the prolonged tightening cycle supports the stock market, along with improving economic conditions. Talk of Shein's London listing, in what would be blockbuster IPO, also helps sentiment after the loss of Arm last year.
UK100 found support by the daily Ichimoku Cloud and reclaims the EMA200 (black line), This gives it the opportunity to set new June highs (8,369) and push for new records.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 17 Apr 2026 https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024 |
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