\n\tFTSE 100 up 38 points to\u00a010,946
\n\tResults from Shell, Rolls, Lloyds,\u00a0LSE, BAE Systems, BAT and more
\n\tBank of England decision at midday\u00a0
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12.44pm: BoE analysis<\/p>\n
Some thoughts on the decision.<\/p>\n
Alpesh Paleja, CBI deputy chief economist, says: “Since the MPC\u2019s last meeting, tensions in the Middle East have become more febrile. Energy prices have spiked, reigniting concerns over a more lasting impact on inflation.”<\/p>\n
He says the Bank was “starting from a relatively more favourable position” as energy prices had fallen back significantly in June, with inflation and wage data coming in lower than previously expected, along with the looser labour market also limiting the pass-through into broader domestic price pressures.<\/p>\n
“These competing influences on inflation mean that interest rates will likely remain on hold for now.<\/p>\n
“Globally, much depends on the duration and intensity of the renewed energy price shock. Closer to home, the Bank may also wait for greater clarity on the fiscal outlook as we head towards the new Chancellor\u2019s first Budget in the Autumn.”<\/p>\n
Raj Badiani, economics director at S&P Global Market Intelligence, says the “on-off” Middle East ceasefire “has helped to dissipate some of the global energy price shock” and so he\u00a0expects a lower peak in UK headline inflation over the coming months, “reducing pressure on the Bank of England to consider interest rate increases in the near term”.<\/p>\n
“Nevertheless, there remains a meaningful probability of a rate hike at either the September or November meeting, as the BoE continues to be concerned about volatility in the Gulf region and the upside risks to energy prices.”<\/p>\n
Scott Gardner, investment strategist at JP\u00a0Morgan Personal Investing: “Despite a rebound in global energy prices, the Bank of England left rates unchanged at 3.75% for a fifth straight meeting. So far, the inflationary impact of the US-Iran conflict appears to be more limited than some may have initially feared though the Bank expects inflation to kick up to 3.2% in the autumn.”<\/p>\n
Recent inflation moves have supported the holding of rates, but with\u00a0higher household energy bills from July likely to “cloud the inflation outlook”, Gardner notes that markets are currently pricing one to two rate hikes this year – “”but it is still too early to tell if these will materialise as energy prices remain volatile”.<\/p>\n
\t\t\t\t\t12.18pm: BoE sees inflation risks, judges current rates appropriate<\/p>\n
The BoE says: “In response to events in the Middle East, crude and refined energy prices have remained volatile and higher than pre-conflict. The impact of the energy shock on the UK economy remains uncertain.<\/p>\n
“Monetary policy cannot influence energy prices but is being set to ensure that the economic adjustment to them occurs in a way that achieves the 2% inflation target sustainably.<\/p>\n
“The policy stance required to achieve this will depend on the scale and duration of the shock, and how it propagates through the economy including via financial conditions.”<\/p>\n
With CPI inflation having fallen to 2.6% since the previous meeting, but expected to rise later this year as the effects of higher energy prices continue to pass through, the MPC said the “risk of material second-round effects in price and wage-setting, against which policy needs to lean, is greater the longer higher energy prices persist”.<\/p>\n
However, they note “little evidence so far to suggest such effects”, along with “clear signs of underlying disinflation in recent data”, along with loose labour market conditions and higher interest rates faced by households and businesses in place “will also act to reduce inflation over time”.<\/p>\n
“The Committee judges that the risks to the inflation outlook are tilted to the upside relative to the central projection in the July Monetary Policy Report, but there remains scope for the outlook to change materially as events in the Middle East unfold.<\/p>\n
“The Committee judges that it is appropriate to maintain Bank Rate at this meeting. The Committee stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term.”<\/p>\n
12.05pm: BoE keeps rates steady, with three dissenters<\/p>\n
The Bank of England left rates unchanged at 3.75%, but it is a ‘hawkish hold’.<\/p>\n
There were three dissenters, with a shift to a 6-3 vote split from 7-2, with Catherine Mann joining Megan Greene and Huw Pill in calling for a rate rise.\u00a0<\/p>\n
11.13am: UK consumers reach for credit as confidence shows signs of life<\/p>\n
UK households added more debt to their balance sheets during the second quarter than at any time since early 2023, says Simon French at Panmure Liberum, reviewing yesterday’s credit data.<\/p>\n
French said the rise in borrowing could show households are using their relatively strong balance sheets to cushion pressure on disposable incomes \u2013 or that there has been an “upswing in animal spirits”.<\/p>\n
“Either reason is welcome for consumer-facing businesses,” he said, with recent retail sales and company updates pointing to resilient spending.<\/p>\n
UK households are collectively holding more cash than debt for the first time since records began, having carried net debt worth around \u00a3700 billion in today’s money in 2008.<\/p>\n
French cautioned that the borrowing increase was not yet a trend. Consumer spending remains vulnerable to higher mortgage refinancing costs and months of speculation about “difficult fiscal decisions” ahead of the autumn Budget.<\/p>\n
10.34am: Eurozone growth beats forecasts<\/p>\n
The eurozone economy in the last quarter grew at the fastest rate since the start of 2025.<\/p>\n
Gross domestic product swelled\u00a00.4% in the second quarter, according to the preliminary reading from Eurostat, beating the 0.2% growth that economists had forecast.<\/p>\n
Year-on-year,\u00a0the flash GDP growth estimate was 1%, also double the expected 0.5% rate.\u00a0<\/p>\n
Across the EU, growth was 0.5% on the previous quarter.<\/p>\n
In the first quarter of 2026, GDP had remained stable in the\u00a0euro area\u00a0and had increased by 0.1% in the\u00a0EU.<\/p>\n
Euro area unemployment was at 6.3% in June 2026, with the EU at 6.0%.<\/p>\n
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Euro area #GDP<\/a> up by 0.4% in Q2 2026, +1.0% compared with Q2 2025: preliminary flash estimate from #Eurostat<\/a> https:\/\/t.co\/hIt3Op5bQu<\/a> pic.twitter.com\/4nFIix2vRH<\/a><\/p>\n
10.08am:\u00a0FTSE hits new intraday record<\/p>\n The FTSE 100\u00a0hit a new record high of\u00a010,978.87 a short while ago, but like yesterday it is easing back a little now.\u00a0<\/p>\n Market analyst Kathleen Brooks at XTB is focusing on the Bank of England decision\u00a0later, where she says the backdrop to today’s meeting “is one of rising volatility”, especially for tech-heavy US and Asian indices.<\/p>\n The South Korean Kospi index has fallen 20% in the past five trading sessions, with a further 1.5% today. In New York, the Nasdaq 100 fell “% overnight, down 10% over the month.<\/p>\n The FTSE 100 stands in contrast to the turmoil in tech-heavy spaces as it is higher by 4.5% over the past month.<\/p>\n “Its mix of energy stocks, defense names and consumer staples are attractive in the current environment,” says Brooks.<\/p>\n From a technical perspective, the index is above its 50 and 200-day single moving averages, and momentum indicators also “suggest that there could be further upside for the UK index as investors rotate away from global tech names”, she adds.<\/p>\n With the London index hitting\u00a0a fresh record intra-day high as we lead up to the BOE meeting, Brooks concludes: “If the BOE sticks to an active hold, whilst mentioning the softening in the economic data, then today\u2019s meeting should not have much of an impact on the FTSE 100, with 11,000 now a key target.”<\/p>\n 9.57am:\u00a0Rentokil sells off, but maybe overdone\u00a0says broker<\/p>\n Rentokil Initial shares plunged 17% after the pest-control group warned of weaker residential demand in North America<\/a> and abandoned a key margin target.<\/p>\n Analyst Sam Dindol at Stifel suggests this might be unfair, describing the results as “a solid update”, with revenue, operating profit and margins all in line with expectations despite the shares tumbling 17%.<\/p>\n He says the contrast with rival Rollins was “particularly notable”, as Rentokil reported strong North American residential revenue during the half. However, customer leads weakened towards the end of June and into July.<\/p>\n Dindol\u00a0does not expect profit forecasts to “change materially”, with Rentokil still guiding for 2026 operating profit in line with market expectations. Stifel’s ‘hold’ rating was retained, with the analyst saying the current valuation “fairly reflects near-term trading trends”.<\/p>\n Allen Wells at Jefferies says the new chief executive’s strategic priorities as “sensible”, although the increased focus on investment “may suggest more muted margin expansion”.<\/p>\n 9.35am: UK vehicle production steadies after difficult start<\/p>\n UK vehicle production fell 7.5% to 385,979 units in the first half, although the decline slowed to just 0.1% in the second quarter, according to the fresh figures from industry body\u00a0SMMT.<\/p>\n Exports rose 3.9% during the second quarter, while June car exports increased for a third consecutive month. The EU remained the industry’s largest overseas market, taking 58.3% of car shipments.<\/p>\n Annual production is expected to remain broadly flat at 740,000 vehicles before returning to growth in 2027.<\/p>\n “Global market weakness, trade pressures and uncompetitive costs are taking their toll,” says\u00a0chief executive Mike Hawes.<\/p>\n He urges the government to take “urgent action on energy costs, reform of market regulation and improved trading arrangements with our global partners” to protect the industry’s 188,000 manufacturing jobs.<\/p>\n 9.07am: Lloyds turns around early loss<\/p>\n Lloyds Banking shares fell over 1% initially but are now up almost 2%.<\/p>\n The results are\u00a0“strong and dependable rather than shooting out the lights”, says market analyst Richard Hunter at ii.<\/p>\n “Given that Lloyds is often seen as a barometer for the UK economy, its progress has been hard-won.”<\/p>\n The early wobbly in the shares may “reflect a pause for breath as investors digest the new strategic aims, following a share price which has risen by 41% over the last year, as compared to a gain of 19% for the wider FTSE 100, and by 101% over the last two years.”<\/p>\n He says the new\u00a0Accelerate 2030 plan seems to be based on three areas of growth:\u00a0“namely the increasing use of intelligent AI, cross group connectivity and increasing productivity, the latter of which is expected to result in an additional \u00a32 billion of cost savings by the end of the plan.”<\/p>\n An early sign is that Lloyds expects some \u00a3100 million of benefits from AI this year in its UK retail arm.<\/p>\n “The more measurable targets are stretching but eminently achievable given the current momentum, with the return on tangible equity (ROTE) expected to exceed 18% by 2028 and then over 20% by 2030.”<\/p>\n Hunter notes that the inflationary impact of the Middle East conflict has led to Lloyds booking an underlying impairment charge of \u00a3617 million, which anticipates potential rather than actual losses.<\/p>\n “The higher figure is based on several scenarios, such as lower GDP growth in the UK, a rise in unemployment and limited gains in residential and commercial property prices. Even so, at the moment, there are few if any signs of deterioration across its lending book.”<\/p>\n 8.42am: Rolls-Royce gets plaudits<\/p>\n The result from Rolls-Royce was “stellar”, says Jefferies analyst Chloe Lemarie,\u00a0with\u00a0sales 11% ahead of the City consensus and operating\u00a0profit 38% ahead.<\/p>\n There was a “major beat across all divisions”, she adds, with Civil, Power Systems and Defence all above the top-end of their mid-term targets, although Civil strongly benefited from catch-ups.<\/p>\n The 17% hike of\u00a0operating\u00a0profit guidance takes it to 14% above what the mid-point of analyst forecast, while free cash flow was also raised by 5%, as op. profit is impacted by non-cash catch-ups<\/p>\n Alex Pugh at\u00a0Freetrade says: “These results show Rolls-Royce has moved into a different era.”<\/p>\n He says the aircraft engine business is “making more money because airlines are flying more, and Rolls-Royce earns a lot from servicing and maintaining those engines once they are in use.<\/p>\n “Defence remains well placed in a higher-spending world, and power systems is getting a boost from data centre demand.”<\/p>\n Also, its nuclear business is a “longer-term play”, though Small Modular Reactor contracts in the UK and Czech Republic are starting to generate revenue and profit.<\/p>\n “Having turned the business around, CEO Tufan Erginbilgic\u2019s next test is whether Rolls-Royce can keep compounding from here. Investors have had a very strong run. The bar is set. Rolls-Royce must show it can keep delivering, not just bounce back.”\u00a0<\/p>\n 8.15am: FTSE fights into small early lead<\/p>\n The FTSE 100 started lower but has quickly fought its way into positive territory, thanks to the barrage of upgrades from heavyweight companies.\u00a0<\/p>\n So far, the index is up eight points at\u00a010,916.5.<\/p>\n Rolls-Royce is top of the early leaderboard, up 3.5% after it was one of those hiking its outlook, while\u00a0BAE Systems is up 1.4%.\u00a0<\/p>\n Miners Rio Tinto and Endeavour are next, both up over 2%, with Antofagasta, Fresnillo, Shell and Glencore also among the risers.\u00a0<\/p>\n 8am: BAE raises profits aim<\/p>\n BAE Systems has joined the battalion of FTSE upgraders, setting its sights on higher full-year profits<\/a>, raising its full-year guidance after higher defence spending helped lift first-half sales and orders, while free cash flow improved sharply.<\/p>\n Sales increased 9% to \u00a315.8 billion in the six months to June, with growth across all divisions. Underlying operating profit rose 11% to \u00a31.7 billion and underlying earnings per share climbed 13% to 38.9p.<\/p>\n Order intake increased to \u00a316.4 billion from \u00a313.2 billion, leaving BAE with a record backlog of \u00a384 billion.<\/p>\n The defence group now expects sales to grow by between 8% and 10% in the 2026 financial year, up from its previous forecast of 7-9%, with underlying operating profit growth expected to reach 10-12%, compared with the previous 9-11% range. Guidance for underlying earnings per share growth was raised to 11-13% from 9-11%.<\/p>\n 7.51am: Rolls raises guidance after strong first half<\/p>\n
\n\u2014 EU_Eurostat (@EU_Eurostat) July 30, 2026<\/a><\/p>\n