The FTSE 100 extended gains after the Bank of England held interest rates at 5.25% on Thursday afternoon, but signalled they would likely make the first cut in August.
Governor Andrew Bailey said that while it was ‘good news’ that inflation had returned to the Bank of England’s 2% target, it needed to be sure that it would stay low before cutting rates.
The pound softened 0.2% to trade at $1.269 against the dollar, while UK government bond yields fell across the board.