© Reuters.
LONDON – UK stocks rebounded on Friday, with the and indices climbing by 1.1% and 1.3% respectively, as investor sentiment improved on the back of economic data suggesting that interest rates may have peaked. The market’s optimism was underpinned by an anticipated shift in the Bank of England’s monetary policy, with futures markets forecasting a significant decrease in interest rates by 2024.
Despite a decline in retail sales volumes this October, which pointed to cautious consumer spending, the broader market was buoyed by prospects of easing inflation and slower economic growth. These conditions have led investors to anticipate potential rate cuts from the current rate of 5.25%, with predictions of an approximate 80 basis points reduction by 2024.
In corporate news, London Stock Exchange Group (LON:)’s shares saw an uptick of 0.4% following its announcement of improved mid-term growth guidance and a commitment to return £1 billion to shareholders in 2024. This news came despite a slight dip of 0.7% in its share price earlier today, before the market recovery.
The pharmaceutical giant AstraZeneca (NASDAQ:) also contributed to the positive market mood, as its shares increased by 1.2%. The boost followed approval from the U.S. health regulator for its Truqap drug, aimed at treating the most common type of breast cancer.
Adding to the upbeat news, transport company FirstGroup’s shares reached a ten-year high after it announced a £100 million joint venture with Hitachi (OTC:) Rail to lease electric bus batteries.
Investors are now closely monitoring these developments, particularly the strategic moves by London Stock Exchange Group and AstraZeneca, as they navigate through the changing economic landscape shaped by central bank policies and consumer behavior.
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