FTSE 100 Rebounds as Miners Boost Gains Amid Rate Hike Expectations

The FTSE 100 rebounded after last week’s downturn, with mining companies leading the charge as gold and silver prices climbed. This uptick provided some stability to the broader market, even as traders factored in a near-certainty that the Bank of England will raise interest rates in November.

The performance split between the FTSE 100 and the FTSE 250 highlighted the underlying trends. The large-cap FTSE 100 saw slight gains, while the more UK-centric FTSE 250 dipped. Precious-metal miners benefited from rising gold and silver prices, counterbalancing some of the market’s downward pressure.

Interest rates remained a key focus, with a services survey indicating that firms faced stronger cost pressures. Economists at Pantheon Macroeconomics noted that this makes it difficult for the Bank of England to keep rates on hold, aligning with market expectations of a November hike nearing certainty.

Higher expected rates also impacted domestically exposed stocks, which often feel the pinch of expensive borrowing more acutely than multinational companies. This dynamic contributed to the relative underperformance of the FTSE 250 compared to the FTSE 100, which is supported by global earners.