Bank of England chief's interest rate comments lift flagging Footsie
Published: 07:34 03 Jun 2025 EDT
The FTSE 100 edged into positive territory on Tuesday after comments from Bank of England officials signalled further interest rate cuts could be on the cards, provided wage growth continues to ease.
Governor Andrew Bailey told MPs he supported last month’s cut to 4.25% largely because the labour market had cooled and businesses were preparing to offer lower pay rises.
“We’ve got a view which is that we will see pay coming down this year,” he said, adding that this would be “crucial” for future rate decisions.
Deputy governor Sarah Breeden echoed that view, saying there was already enough evidence of a softer jobs market to justify a cut.
But policymaker Catherine Mann, who voted to hold rates steady, warned that persistent volatility in markets and rising inflation could still alter consumer behaviour.
The Monetary Policy Committee remains divided, with members split between holding, trimming and cutting more aggressively.
The FTSE 100, which spent most of Tuesday in the red, flipped 5.4 points into the green to trade at 8,779.68,
