FTSE 100 close: Markets shrug off Bailey’s rate cut comments as M&S soars
London’s FTSE indexes were mixed on Wednesday as traders digested comments from Andrew Bailey which suggested that the first rate cuts were a long way off.
The FTSE 100 finished 0.11 per cent lower at 7,401.72, while the FTSE 250 climbed 0.48 per cent to 17,846.26.
Markets spent the afternoon digesting comments from Bailey, governor of the Bank of England, who told a conference in Ireland that “it’s really too early to be talking about cutting rates.”
“The market of course will reach a view it has to reach. So I totally understand that. But we are very clear we’re not talking about that,” he said.
Bailey’s comments come two days after Huw Pill suggested rate cuts could come in the middle of next year, in line with market expectations. Gilt yields were little changed following Bailey’s comments while sterling regained ground after falling in the early morning.
On the FTSE 100, M&S rocketed to the top of the bluechip index, up 8.5 per cent, after its profits rose to £360.2m.
As a result of its strong results, the retailer said it would return to paying a “modest dividend” — its first in four years.
“The yield is relatively low, but it marks a moment of significance for the group, and it’s a real statement of confidence around the outlook for the business from M&S’s management,” Aarin Chiekrie, equity analyst at Hargreaves Lansdown said.
On the FTSE 250, ITV shares sank around six per cent as it revealed advertising revenue had fallen seven per cent in the year-to-date.
The broadcaster said: “In light of these conditions, total content spend for the full year will be £10 million lower than previously guided at around £1,290 million as we rephase content into 2024.”
“ITV is at the mercy of creaking economic conditions,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said.
“Companies are snapping marketing purses shut as they buckle down for the unknown over the coming months, and that makes moving ITV’s advertising top-line in the right direction a very difficult task,” she continued.