FTSE 100 Breaks 8,300 as Cooling Inflation Fuels Rate Cut Expectations

The FTSE 100 index witnessed a significant rise, climbing 99 points (+1.21%) to close the day a shade above 8,300, as inflation figures showed a slowdown for December. This development raised hopes for potential rate cuts in February, influencing investor sentiment and market movements.

London listed bank shares, led by Barclays (+6.7%), Lloyds (+6.27%), and Natwest (+4.9%) all delivered strong gains on the day, as U.S banks also announced impressive earnings to set off the season.

Britain’s National Energy System Operator has initiated a temporary halt on new application submissions by energy firms for grid connections. This delay is intended to allow time for reforms within the system, addressing previously experienced delays that have reached up to 14 years.

In the business sector, the Institute of Chartered Accountants in England and Wales (ICAEW) revealed a decline in business confidence. Their monitor showed confidence at 0.2 in the fourth quarter of 2024, down from 14.4, as businesses anticipate tax hikes.

In corporate news, Loungers PLC (LON: LGRS) has received a takeover offer from Fortress Investment Group worth £354 million, valuing the shares at 325p each. On the lending front, UK mortgage lenders are refraining from increasing interest rates despite rising swap rates, a move likely influenced by elevated government borrowing costs.

Rolls Royce shares (LON: RR) ended the day as one of the Footsie’s laggards, down 1.27%.