FTSE Advances as BoE Holds Rates and Pauses Gilt Sales
FTSE Finish Line September 17 2026 : FTSE Advances as BoE Holds Rates and Pauses Gilt Sales
The U.K.'s benchmark FTSE 100 advanced on Thursday after the Bank of England held interest rates steady as expected and announced a complete halt to sales of long-dated gilts. Despite persistent anxieties surrounding Middle East conflict and elevated energy prices, equity markets found footing as falling gilt yields provided relief to broader asset valuations.
Corporate movers delivered strong support across both blue-chip and mid-cap spaces. Pharmaceutical heavyweight AstraZeneca rose around 1% after announcing a 200 million yuan ($29.81 million) investment to upgrade its manufacturing and supply facility in Wuxi, China. In the mid-cap FTSE 250, budget airline Wizz Air surged 4% after setting medium-term financial targets—including €10 billion ($11.47 billion) in annual revenue—and raising its second-quarter revenue per available seat kilometre (RASK) forecast. Construction group Galliford Try rallied 6% following a 24% surge in annual pre-tax profits, driven by disciplined cost control and increased project activity.
Fixed income markets rallied following the central bank's policy update. The Bank of England paused UK government bond sales for the next six months and stopped sales of 20- and 30-year gilts entirely, helping to soothe the market just days after a global bond sell-off drove 30-year borrowing costs to 1998 highs. As a result, benchmark 10-year Gilt yields fell 6 basis points to 5.243%, marking their lowest level in a week.
On the monetary policy front, the BoE’s Monetary Policy Committee voted 6-3 to maintain the Bank Rate at 3.75%. External members Megan Greene, Catherine Mann, and Huw Pill again voted for a 25-basis-point hike, while the remaining six preferred to keep rates on hold. Beneath the unchanged vote split, minutes revealed growing concern over the inflation outlook. Driven by surging oil and gas prices near the Bank's July adverse scenario levels, updated projections now show CPI inflation peaking slightly above 4% in early 2027. Governor Andrew Bailey explicitly warned that prolonged Middle East conflict may force a tighter stance, lowering the hurdle for a rate hike as soon as November, with money markets fully pricing in at least one quarter-point increase this year.
The BoE's decision leaves it adopting a relatively patient posture compared to global peers. On Wednesday, the U.S. Federal Reserve raised interest rates by 25 basis points with Chair Kevin Warsh signaling another potential hike in the coming months, following earlier tightening by the European Central Bank. Looking ahead to Friday, investors will focus on the UK retail sales print to gauge consumer resilience amid sticky energy costs and elevated borrowing conditions.
Finish Line: U.K. equities gained ground as the Bank of England's decision to pause long-dated gilt sales soothed bond market turmoil and offset rate-hike warnings. While soaring crude oil and revised inflation forecasts keep the prospect of a November rate hike alive, corporate earnings strength and lower gilt yields provided a welcome boost for the FTSE 100.
TECHNICAL & TRADE VIEW – FTSE100
Daily VWAP Bullish
Weekly VWAP Bearish>Bullish
Above 10700 Target 11150
Below 10400 Target 9500
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!