The FTSE 100 maintained its upward momentum on November 5, even as the Bank of England announced its first rate hike in more than three years and warned that further monetary tightening could lie ahead, with strength in bank shares and better-than-expected corporate earnings still providing support to the market.
As of press time, the FTSE 100 had risen 0.81% to 10,916.49 points, having climbed about 1% during the session to briefly surpass the closing record set in February this year and approach the intraday all-time high reached on July 31.
The Bank of England announced a 25 basis point rate increase that day, lifting the benchmark rate to 4%, and projected that UK inflation could rise to around 5% by mid-2027. Nevertheless, the FTSE 100 held broadly steady after the rate decision was released.
The financial sector served as the main driver of the day's gains, with major bank stocks including HSBC Holdings plc, Barclays plc, Standard Chartered plc and Lloyds Banking Group plc all strengthening broadly.
In addition, Diageo plc reported first-quarter revenue that beat market expectations, pushing its shares up about 5% at one point during the session.
A sharp pullback in international oil prices also improved market sentiment. Driven by expectations of easing US-Iran tensions following the US midterm elections, Brent crude fell below $100 per barrel, posting a weekly decline of about 20%.
The drop in oil prices is expected to ease energy cost pressures on UK companies and reduce the risk of future inflation increases, providing additional support for the UK stock market.
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