(Reuters) -The UK’s FTSE 100 closed flat on Tuesday, with banking stocks helping keep overall losses in check, while midcap shares slipped as investors trimmed bets on interest rate cuts after data showed a pick-up in wage growth.
The FTSE 100 was little changed at the close, while the mid-cap FTSE 250 slipped 0.3%.
Bank stocks were up 1.5%, with HSBC rising about 2% to an over two-decade high as investors cheered the Asia-focussed lender’s restructuring efforts.
InterContinental Hotels Group lost 4.5%, the top decliner on the FTSE 100, after the Holiday Inn owner announced a $900 million share buyback plan which fell short of some investors’ estimates.
Data showed British pay growth accelerated in the last three months of 2024, underscoring why the Bank of England has adopted a careful stance about rate cuts despite a weak overall economy.
The BoE lowered its benchmark interest rate to 4.5% from 4.75% earlier this month. Traders are pricing in only two more rate cuts for the rest of 2025.
BoE Governor Andrew Bailey said he wanted to see less volatility in medium and longer-dated bond yields that have been driven up by speculation about the trade policies of U.S. President Donald Trump.
The aerospace and defence index rose 0.9%, adding to their 4.5% jump in the previous session after British Prime Minister Keir Starmer said it was crucial for all of Europe to spend more on defence.
Among other individual stocks, Plus500 slid 4.8%, the biggest dragg on the mid-cap index, after the trading platform’s full-year forecast came in line with market expectations.
BT Group fell 2.9% after Citi double-downgraded the mobile and broadband operator’s stock to “sell” from “buy”.
(Reporting by Nikhil Sharma, Ragini Mathur and Sanchayaita Roy; Editing by Savio D’Souza and Susan Fenton)
