FTSE 100 rises to 11-month high as BoE set to cut rates

Britain’s top shares index rose to an 11-month high, boosted by expectations of an interest rate cut from the Bank of England.

The blue-chip FTSE 100 index rose 1 per cent to 6,738.75 points while the FTSE 250 mid-cap index, whose companies are more exposed to the domestic economy, advanced 0.6 per cent.

The Bank of England is expected to halve its benchmark interest rate to a record low of 0.25 per cent, the first cut in more than seven years, as it tries to cushion the economy from the shock late June vote to pull Britain out of the European Union.

The central bank’s monthly policy statement is due at 1100 GMT.

Lower interest rates typically boost stock markets, as they dent returns on bonds and cash and can reduce borrowing costs for companies.

Reuters