British Equities Rise as Central Bank Lowers Interest Rate

11:47 AM EST, 12/18/2025 (MT Newswires) -- The UK's benchmark FTSE 100 index gained 0.69% on Thursday's close after the Bank of England lowered the key interest rate by 25 basis points to 3.75%, as widely expected. The Monetary Policy Committee voted 5-4 in favor of a cut, with four members opting to maintain the bank rate. It reiterated that the potential for further rate cuts remains subject to the inflation outlook. "The decision was more hawkish than expected, leaving market rates higher and sterling slightly stronger. It's a close call whether the Bank cuts again in February or March. But we think the UK will soon look like less of an inflation outlier, and we're expecting two cuts in the first half of 2026," ING said. In corporate news, pest control and hygiene services company Rentokil Initial (RTO.L) was among the top performers on the blue-chip index, rising 3.86%. BofA Global Research upgraded the stock to buy from neutral and increased the price objective to 5.1 pounds sterling from 4.25 pounds. "Rentokil (RTO) is one of our '25 stocks for 2026,' and we also add it to our Europe 1 list of top ideas," analysts said. "Positioning is light (c7% short interest, 40 days to cover) and, with more visibility finally on the Terminix integration, we see scope for a rerating in 2026." Metlen Energy & Metals (MTLN.L) grew 1.84% after its defense equipment arm M Technologies secured a contract to supply 200 assemblies for the Leopard 2A8 battle tank to KNDS Deutschland. BP (BP.L) lost 1.36% after the oil and gas giant named Woodside Energy Chief Executive Officer Meg O'Neill as its next chief executive officer, effective April 1, 2026. Outgoing CEO Murray Auchincloss' resignation took effect on Thursday.