UK FTSE 100 inches higher as financials and defence offset energy drag
London equities trade modestly higher on Tuesday as gains in heavyweight financial and defence stocks counter pressure from weaker energy shares. Investors are also weighing hawkish comments from Bank of England Deputy Governor Clare Lombardelli alongside fresh signals on consumer spending and interest rate expectations.
Highlights
- FTSE 100 rises 0.2% to 10,811.28 at 1033 GMT, driven by strength in financial and defence sectors while energy stocks decline.
- Bank of England rate hike probability for December stands at 50% after Clare Lombardelli's comments, with financials like Lion Finance Group up 3.6%.
- Energy sector drops 2.2% as Brent crude falls below $90 per barrel, while retail data suggests modest UK spending growth in October.
Sector gains and rate outlook support market
As reported by Reuters, the FTSE 100 rises 0.2% to 10,811.28 points by 1033 GMT, while the midcap FTSE 250 adds 0.6% as buying in financial and defence names offsets broader weakness in energy stocks.Aerospace and defence lead sector gains, rising 2.4%, with Rolls-Royce up 3.3% and among the top performers on the blue-chip index. Melrose Industries and Babcock International Group also gain more than 1% each.
Financial stocks provide the biggest lift to the benchmark. Lion Finance Group climbs 3.6% to lead the FTSE 100, while Prudential advances 3% and Barclays adds 2.2%.
Investors also parse comments from Clare Lombardelli, who says in an interview with the Guardian that she would not rule out a December rate hike. LSEG data show money markets are pricing in about a 50% chance of a 25-basis-point Bank of England increase in December.
Energy weakness and retail data shape UK outlook
The energy sector posts the sharpest decline, falling 2.2% after Brent crude slips below $90 a barrel. Oil prices come under pressure after U.S. President Donald Trump downplays further military action against Iran, easing concerns about Middle East supply risks.On the economic data front, British retail spending rises modestly in October despite higher petrol prices, with households cutting back in some categories before Black Friday promotions, according to a British Retail Consortium survey. Separate data from Worldpanel by Numerator show Britons buy more essentials after the government's "Be Ready" campaign launches, but do not indicate panic buying.
Among individual stocks, Vodafone falls 1.1% even after raising its full-year profit and cash flow guidance. Marks & Spencer gains 1.9% after the clothing and food retailer forecasts profit growth ahead of sales over the medium term.
In a previous article, we explained how a Reuters poll shifted expectations toward a November rate hike.
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