London markets post mixed bag as investors mull Bank’s next rate move

London markets were a mixed bag yesterday as investors mulled the Bank of England’s next move on interest rates. A strong jobs print boosted investor sentiment yesterday morning, lifting the capital’s main indexes.

However, the FTSE 100 gave up morning gains to close 0.18 per cent lower at 7,218.64 points, as did the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, finishing down 0.43 per cent at 22,550.69 points.

Data from the Office for National Statistics indicated the UK labour market is holding up well without the support of the furlough scheme, which finished at the end of September.

Howverm, record vacancies prompting firms to hike pay suggest inflationary pressures are intensifying, increasing the likelihood of the Bank of England hiking interest rates at its meeting tomorrow.

Russ Mould, investment director at AJ Bell, said: “More signs of a tightening jobs market may be good news for employees but could also add to inflation concerns ahead of the Bank of England’s meeting on Thursday.”

But, uncertainty over the impact Omicron will have on the economy could prompt the Bank to leave rates unchanged.

Exterminator Rentokil was by far the worst performer on the FTSE 100 yesterday as investors spat out a $6.7bn tie up with Terminix. Its shares plunged over 12 per cent.

Telecoms giant BT was another poor performer, dropping 4.29 per cent on concerns it could fall into the hands of French businessman Patrick Drahi.  

The pound rose against the dollar.