ondon’s markets finished lower on Thursday despite the Bank of England holding interest rates for the first time since 2021, which weighed on the value of the pound.
The central bank voted to keep rates 5.25%, ending a run of 14 consecutive hikes, providing a boost to retail and housebuilder stocks.
However, the improvement largely faded throughout the rest of the session in the face of weaker global trading sentiment.
The FTSE 100 moved 0.69%, or 53.03 points, lower to finish at 7,678.62.
Sterling was knocked back as a result of the rate decision, dragging it to its lowest against the dollar since May.
The pound was down O.38% at 1.228 US dollars and was 0.33% lower at 1.153 euros at market close in London.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The Bank of England has finally pushed the big red pause button, prompting a rush of relief for companies and consumers bearing the brunt of higher borrowing costs.
“The FTSE 100 climbed back sharply into positive territory, but then dipped back again, as investors assess the difficulties ahead for the UK economy and looked further afield to the prospect of the Fed raising rates again later this year, and the knock-on effect to growth in the United States.
“Housebuilders initially lifted in a relief wave, with rays of light appearing at the end of a long dark tunnel.”
Elsewhere in Europe, losses were heavier as sentiment was also impacted by the US Federal Reserve’s decision to also hold interest rates on Wednesday.
Elsewhere in Europe, Germany’s Dax index was 1.33% lower for the day and the Cac 40 closed down 1.59%.
Stateside, the US markets saw similar downbeat sentiment, drifting lower as bond yields lifted higher.
In company news, retailers led the way on the FTSE 100, which saw JD Sports score the biggest price jump after a strong set of results.
The high street chain said it is on track to deliver a rise in full-year profits as its shoppers remain “resilient” despite wider consumer spending woes.
As a result, shares in the company finished 11.95p higher at 144.9p on Thursday.
Elsewhere in the sector, rival Next was another strong stock after the fashion specialist bumped up its profit expectations for the third time this year, telling investors its sales were boosted by warm weather and rising wages.
Next reported a better-than-expected 5.4% jump in total sales over the six months to July, compared with the same period last year, and a 3.2% increase in sales of its brands at full price.
Shares in the business were up 244p at 7,350p.
Online grocery business Ocado was a heavy faller after brokers at Exane downgraded the stock, flagging concerns over growth levels in its retail business.
Shares in the firm, which had rallied over the summer, fell by 160.6p to 647.8p.
Elsewhere, the price of a barrel of Brent crude rose by 0.17% to 93.69 US dollars as markets were closing in London.
The biggest risers on the FTSE 100 were JD Sports, up 11.95p to 144.9p, Next, up 244p to 7,350p, ConvaTec, up 6.8p to 223p, Kingfisher, up 4.7p to 220.4p, and Marks & Spencer, up 5p to 236.1p.
The biggest fallers on the FTSE 100 were Ocado, down 160.6p to 647.8p, Flutter Entertainment, down 510p to 14,105p, Croda, down 175p to 4,881p, Antofagasta, down 46p to 1,409p, and Melrose Industries, down 14.4p to 471.6p.