London markets muted ahead of US Federal Reserve rate decision

London markets were mixed today as traders brace for another potential rate bazooka from the US Federal Reserve on Wednesday.

The capital’s premier FTSE 100 index edged 0.41 per cent higher to 7,306.30 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, dropped 0.11 per cent to 19,802.99 points.

Investors were seemingly adverse to making any sudden moves before Fed chair Jerome Powell and the rest of the federal open market committee announce their next decision on interest rates later this week.

Most traders expect the Fed to launch another 75 basis point rate, the same amount they moved by last month, to chase down a 40-year high inflation rate of 9.1 per cent across the pond.

FTSE 100-listed banks jumped ahead of second quarter earnings season kicking off this week.

Now majority-private owned NatWest, which updates markets on Friday, climbed 2.27 per cent, while Britain’s biggest lender, HSBC, which reports on 1 August, added 2.19 per cent.

Asia and emerging markets-focused Standard Chartered topped the FTSE 100’s biggest risers’ column, advancing 3.18 per cent.

The City is betting a series of rate hikes from the Bank of England will have lifted high street lenders’ bottom lines.

GSK’s consumer pharmaceutical spin-out business and FTSE 100-listed Haleon continued to slide, shedding 3.63 per cent. It started trading on the index last week.

The pound gained ground on the greenback, strengthening 0.28 per cent to buy $1.2036.

Travel stocks led the FTSE 250 lower. Short haul airline easyJet lost 1.74 per cent and cruise operator Carnival dipped just over three per cent.

The pound gained ground on the greenback, strengthening 0.19 per cent to buy $1.2022.