The FTSE 100 closed down 1.04% on Thursday as investors digested the latest UK labour market figures and the Bank of England’s rate decision.
The central bank held its key interest rate steady at 3.75%, a move that had been widely anticipated by markets heading into the announcement.
The Monetary Policy Committee voted 7-2 in favour of keeping rates on hold, with two members pushing for a 25-basis-point increase that would have lifted the rate to 4%.
UK unemployment came in at 4.9% for the three months to April, according to the Office for National Statistics, coming in below the 5% consensus estimate and the prior quarter’s 5% reading.
Average weekly earnings including bonuses rose 4.4% year over year, matching the revised increase from the previous period and exceeding market expectations for 4% growth.
Earnings growth excluding bonuses held steady at 3.4%, also ahead of the 3.2% consensus forecast, adding a layer of complexity to the inflation outlook for policymakers.
Berenberg urged caution in interpreting the headline unemployment figure, noting that broader employment indicators painted a less encouraging picture of the labour market.
“Do not take the decline in the unemployment rate to 4.9% in the three months to April from 5.2% in the prior three months as a sign the labour market is improving either,” Berenberg said.
Informa (INF.L) was among the day’s standout performers, rising 2.76% after the events and academic research group affirmed its 2026 guidance for double-digit underlying growth in adjusted EPS.
Underlying revenue for the five months ended May 31 climbed 6.4% year over year, giving investors added confidence in the group’s trajectory through the remainder of the year.
BofA Global Research said it expected investors to look through short-term disruption, noting that “2027 offers reacceleration in earnings growth into the biennial ‘up year’ (BofAe EPS +3% ahead of consensus).”
Melrose Industries (MRO.L) advanced 2.01% after BofA reaffirmed its buy rating on the aerospace company, citing the underlying drivers of cash earnings as remaining intact despite investor concerns.
“We see Melrose as attractive, with a broadly in-line 1H26 print likely to provide incremental confidence in a valuation floor,” BofA analysts wrote in their note.
On the geopolitical front, US President Donald Trump and Iranian counterpart Masoud Pezeshkian digitally signed a memorandum of understanding aimed at ending the conflict and reopening the Strait of Hormuz.
Attention now turns to a 60-day negotiating period focused on Tehran’s nuclear programme, a development that could have significant implications for global energy markets.