FTSE rises on hints of rate cut

TheFTSE100Index rose 30.6 points to 6730.5 yesterday amid expectations the Bank of England will administer a fresh dose of monetary stimulus next month.

City experts said there was now a high chance of an interest rate cut next month after a closely-watched report – the Markit Flash UK Composite Output Index – said UK economic growth suffered a “dramatic deterioration” following the Brexit vote.

Data collected between July 12 and 21 delivered a stark picture of the state of theUKeconomy, withmany analysts now warning the UK is heading for a recession.

Neil Wilson, markets analyst at ETX Capital, said: “It is almost certain the Bank of England will pull the trigger onaggressive stimulus to boost aggregate demand.”

Howard Archer, chief UK and European economist at IHS Global Insights, said the “horrible survey” showed the economy taking “a good kicking” as uncertainty and concern sets in.