The FTSE 100 added 0.3% on Friday, tracking a broader rally across European markets after Federal Reserve Chair Kevin Warsh adopted a cautious stance on inflation at the Jackson Hole symposium. Warsh noted that recent PCE and CPI data were encouraging but still insufficient to show a decisive improvement in underlying inflation, reinforcing expectations that US monetary policy may need to remain restrictive. In turn, market-implied odds of a rate hike in September increased.
Financials were among the standout performers: HSBC and Standard Chartered each rose about 1.7%, while Barclays and Lloyds Banking Group also gained. Utilities lent additional support, led by SSE with a 2.6% rise, and smaller advances from Severn Trent, Centrica and National Grid. Shell finished modestly higher.
In contrast, defence contractors BAE Systems and Babcock International fell sharply. Despite Friday’s gains, the FTSE 100 closed August roughly 0.5% lower overall, snapping a four-month winning streak.