London stocks posted moderate losses on Friday, making the FTSE 100 one of the best performing indices in Europe, as investors continued to analyze the Bank of England policy meeting the day before.
The FTSE 100 UKX,
Slipped 0.1% to 7,069, bracing for a weekly gain of 1.5%. While losses in Europe were larger, the main London index was supported by some decline in the strength of the pound GBPUSD,
which was down 0.3% to $ 1.368 after crossing $ 1.37 on Thursday.
The British pound rose earlier after the market took a hawkish view of the BoE’s move, in which a member defected to the camp of wanting to end bond buying immediately, and a majority said ‘a rate hike could occur as early as this year. The Federal Reserve also met this week, delaying cutting back on its bond purchases, but also with a hawkish undertone.
“Persistent and rising inflation would suggest central banks need to act quickly to bring the situation under control, which means interest rate hikes as soon as possible,” said Russ Mold, chief investment officer at AJ Bell, in a note. to customers. “However, a gloomy winter is ahead due to pressure on energy prices, supply chain issues and a sharp rise in the cost of living.”
“All of these factors threaten economic growth, so central banks have a fine line to go – raise rates too quickly and the economy could falter, but don’t act and risk driving inflation away,” Mold said. .
Data released on Friday showed UK consumer confidence took a hit in September, falling to its lowest level in five months, amid concerns over inflation and the end of government support. GfK’s consumer confidence barometer stood at minus 13 in September, down five points from August and falling short of economists’ expectations.
Rolls-Royce Holding RR,
was one of the main winners, with stocks rising 5%. Berenberg analysts Andrew Gollan and Ross Law posted a positive note on the company on Thursday, saying the US decision this week to open its borders to vaccinated travelers was a “stronger recovery in long-haul travel, which is in the spotlight. lagging behind national travel markets “,.
AstraZeneca shares AZN,
were another big winner, with shares rising 3.4% after the drug company reported positive results for a Phase 3 trial of its drug Lynparza to treat prostate cancer.