• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

How have UK stocks historically performed after BOE rate cuts?

by August 1, 2024
written by August 1, 2024

UK stocks are poised for potential gains following the Bank of England’s (BOE) decision to cut the key interest rate by 25 basis points to 5.0%. 

This move, aimed at stimulating economic growth, aligns with historical trends that suggest a positive outlook for benchmark UK indices in the months ahead.

Historical performance of FTSE 100 and FTSE 250

Historically, the FTSE 100 and FTSE 250 indices have responded favorably to BOE rate cuts. 

In three out of the last four instances when the Bank of England reduced rates—specifically in 1986, 1990, and 1998—the FTSE 100 saw an average increase of over 20% within the subsequent 12 months. 

Similarly, the FTSE 250 experienced even more significant gains, rallying by 25% or more in these periods.

However, it’s worth noting that the only exception to this trend occurred in 2007, when both indices experienced declines. 

The FTSE 100 dropped by 38%, and the FTSE 250 fell by 46% over the year following a rate cut. 

This downturn was largely attributed to the global financial crisis, making it an outlier in the historical data.

Impact of lower rates on GBP and housing market

The BOE’s decision to lower rates was endorsed by a narrow margin of five to four votes within the Monetary Policy Committee (MPC). 

This decision reflects the central bank’s focus on fostering economic stability without triggering new inflationary pressures. 

Consumer price inflation in the UK has moderated significantly, standing at 2.0% annually in May and June, down from a peak of 11.1% in October 2022.

The current rate cut comes amidst market expectations for additional reductions. 

Money markets are signaling that the BOE might implement two more rate cuts over the next five months. In response to the rate cut, the British pound (GBP) initially weakened against the US dollar but later began to recover. This volatility underscores the market’s sensitivity to future monetary policy signals.

The BOE’s rate cut is also anticipated to provide a much-needed boost to the housing market. 

Stephanie Daley of Alexander Hall commented on the potential positive effects, stating, “The BOE’s decision offers a significant opportunity for homeowners and homebuyers. While mortgage rates may not drop immediately, this change should help release pent-up demand and restore confidence in the housing sector.”

Overall, the BOE’s recent move could set the stage for a favorable period for UK stocks, particularly if historical patterns hold true. 

Investors and market analysts will be closely watching how these developments unfold and what impact they will have on the broader economic landscape.

The post How have UK stocks historically performed after BOE rate cuts? appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Riot Platforms stock has a 71% upside: analyst
next post
Nancy Pelosi buys $1.13 million worth of Nvidia: 3 reasons to follow her lead

related articles

Asian markets open: Nikkei, Hang Seng fall on...

June 12, 2025

Aluminum and steel tariffs spark rise in secondary...

June 12, 2025

Airbus sees aviation boom ahead, global fleet to...

June 12, 2025

US-China trade talks and Washington’s decade-long effort to...

June 12, 2025

Europe markets open: Stoxx 600 dips as UK...

June 12, 2025

UK GDP falls by 0.3% in April as...

June 12, 2025

Gordon Brothers buys Poundland; pledges £80 mn for...

June 12, 2025

Air India plane crash: London-bound flight with 242...

June 12, 2025

Air India plane crash live update: Indian President...

June 12, 2025

Copper remains supported for now even as China...

June 12, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • ‘False’: Trump admin rebukes claims intel officials are frequently using Signal to send classified info

    April 3, 2025
  • Israel launches sweeping strike on Iran while Trump administration seeks diplomatic solution

    June 13, 2025
  • Japan Stocks Declined Today: Topix Shaved Off 3.2%

    August 1, 2024
  • Pentagon announces new counter-drone strategy as unmanned attacks on US interests skyrocket

    December 9, 2024
  • Jewish-American group urges US citizens in Israel to vote as absentee ballots can impact swing states

    October 22, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (5,925)
  • Investing (634)
  • Stock (922)

Latest Posts

  • Pentagon presses Japan, Australia on role in possible Taiwan conflict

    July 14, 2025
  • Citibank customers report fraud alerts and account access issues

    January 16, 2025
  • FBI investigating Iran’s hack of Trump campaign documents

    August 13, 2024

Recent Posts

  • DHS employee warned colleagues that Walz’s nomination ‘feeds into’ China’s efforts to influence DC

    October 29, 2024
  • Israel rescues hostage after 325 days in Hamas captivity

    August 27, 2024
  • Buy Bitcoin Under $100K Before The Next Bull Run

    April 22, 2025

Editor’s Pick

  • Ilhan Omar blasts Harris-Walz campaign for courting Liz Cheney: ‘Huge misstep’

    November 26, 2024
  • Biden’s high-stakes solo press conference slammed from the right as ‘another disaster’

    July 12, 2024
  • House Democrat moves to force Trump impeachment vote

    May 13, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock