London’s FTSE 100 slipped 0.5% to 10,255 on Friday, ending a turbulent week down 0.2% overall, as investors weighed weaker‑than‑expected UK growth data and the potential implications of intensifying Middle East tensions for Bank of England policy ahead of next week’s meeting.
Figures from the Office for National Statistics showed the UK economy flatlined in January, undershooting forecasts for 0.2% growth. Despite the lacklustre performance, surging energy prices linked to the conflict involving the US, Israel and Iran have prompted markets to price in around an 80% probability of a 25-basis-point rate increase by the end of the year.
For the March meeting, the Bank Rate is widely expected to be kept on hold, with market participants focused on the voting pattern within the Monetary Policy Committee; a 7–2 or 6–3 split is viewed as the most likely outcome.
In corporate news, housebuilder Berkeley Group fell more than 2%, even as it reiterated its profit guidance for the year, warning that the conflict in the Middle East is “weighing heavily on risk sentiment.”