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FTSE 100 gains as banks lift sentiment after rate hike

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(Reuters) – London’s FTSE 100 rose on Friday driven by commodity-linked stocks and banks, a day after the Bank of England (BoE) raised interest rates for the second consecutive time to curb inflation.

The FTSE 100 index rose 0.8%, with energy stocks and base metal miners leading the gains, while the FTSE mid-cap index rose 0.6%.

The BoE raised interest rates to 0.5% on Thursday and nearly half of its policymakers wanted a bigger increase to contain rampant price pressures, as the central bank warned inflation will soon top 7%.

The banking sub-index was up 0.5% tracking two-year yields on British bonds, which rose to their highest since April 2011, while the five-year yields touched a level last seen in Oct 2018.

Shares of SSP gained 1.5%, despite Upper Crust owner SSP saying its revenue took a hit from restrictions imposed to contain the spread of the Omicron variant, while saying sales were recovering after the lifting of curbs in the UK and some European markets.

FTSE 100 gains as banks lift sentiment after rate hike

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