London stocks lift after Bank of England holds rates

Leading London shares tipped higher as a dovish stance from the Bank of England helped to keep sentiment aloft.

Concerns of a change in policy by the US Federal Reserve also receded slightly to boost global markets.

In London, the Bank of England’s Monetary Policy Committee held firm to keep interest rates and quantitative easing steady, adding that it expects the current acceleration in inflation to be fleeting.

The FTSE 100 closed 35.91 points, or 0.51%, higher at 7,109.97 on Thursday.

Joshua Mahony, senior market analyst at IG, said: “Markets throughout Europe and the US are enjoying one of the more memorable days in a week that has largely been dominated by indecision and uncertainty.

“The Bank of England has been one of the main determinants of that positive outlook, with them pc allaying fears that the recent hawkish shift from the Fed is the first in a wave of many such moves.

“That dovish stance helped to boost the FTSE 100 in two ways, with the prospect of loose monetary policy lifting stocks and driving the pound lower.”

Sterling drifted back after the central bank’s announcement but remained higher against a weak US dollar and euro.

The pound was 0.12% higher versus the US dollar at 1.391 and increased by 0.09% against the euro to 1.166.

Europe’s main markets reversed Wednesday’s losses on the back of the easing of inflation concerns.

The German Dax increased by 0.86% and the French Cac moved 1.22% higher.

Across the Atlantic, the S&P and Nasdaq hit record highs again as traders were boosted by Fed chair Jay Powell’s comments that inflation will be “transitory”.

In company news, Deliveroo shares jumped after the Court of Appeal rejected a legal attempt to have its riders collectively recognised as workers.

The Court of Appeal ruled that the riders are therefore also not entitled to bargain collectively to improve their pay or working conditions.

Shares in the company closed 23.3p higher at 274.9p, while rival Just Eat Takeaway also finished 171p higher at 6,573p.

Crest Nicholson made gains after the housebuilder hiked its full-year profit outlook on the back of surging sales and said demand is set to hold up after the stamp duty holiday ends.

Shares in the company climbed by 4.8p to 435.2p after it swung to a pre-tax profit of £36.3 million for the six months to April 30.