London Stocks Decline Amid Rate Speculation and Earnings Reports

In London, the main stock indexes faced a decline on Thursday, primarily due to the strengthening of the pound following the Bank of England's decision to maintain interest rates. This decision coincided with anticipation of the upcoming government budget and a wave of corporate earnings reports.

The FTSE 100 index fell by 0.4%, retreating from its record high, while the midcap index dropped by 0.5% as investors showed a general risk-off attitude. The Bank of England's choice to keep borrowing costs unchanged was expected, but hints from Governor Andrew Bailey suggested possible monetary easing, raising expectations for a rate cut in December post-budget.

As sterling recovered after hitting recent lows, it gained 0.45% post-BoE decision, while industrial and aerospace stocks weighed down markets. Amidst the sectoral shifts, AstraZeneca's significant gains supported the pharmaceutical sector, whereas Smith & Nephew PLC suffered a sharp revenue miss. In contrast, the banking index saw positive movement as finance minister Rachel Reeves reportedly decided against a budget tax raid.