FTSE Slumps on Central Bank Rate Decisions

The FTSE 100 index fell sharply on Friday, closing down 1.5% at 10,659.13, as investors digested central bank rate decisions from this week.

The Federal Reserve raised interest rates by 25 basis points for the first time since 2023, with Chair Warsh commenting that further monetary policy tightening is expected in the remaining two meetings of 2026.

The Bank of Japan followed suit with a similar-sized hike, but BoJ chief Ueda described it as 'preemptive', saying the bank aims to act before being forced into large moves that could unsettle financial markets.

The Bank of England held interest rates at 3.75% as expected, with the Monetary Policy Committee voting by a majority of 6-3 to keep rates on hold.