The FTSE 100 (^FTSE) rose on Monday morning to kick off a busy week of interest rate decisions and economic data releases.
The Bank of England (BoE) is set to announce its latest borrowing costs decision on Thursday, with the central bank widely expected to lower rates by 25 basis points to 3.75%.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Markets are pricing in around a 90% chance of a move, so, absent any shocks, the decision itself matters less than the Bank’s tone.”
The European Central Bank (ECB) is due to deliver its latest decision on Thursday but is expected to keep its deposit rate at 2%. The Bank of Japan will then announce its decision on Friday, with economists predicting it will hike its deposit rate to 0.75%.
On the economic data front, UK jobs numbers are set to be released on Tuesday, followed by the latest consumer price index (CPI) inflation reading on Wednesday and government borrowing figures on Friday.
In the US, the spotlight will be on October and November’s employment reports, which are due to be released on Tuesday after being delayed by the government shutdown. CPI is then slated for release on Thursday.
Britzman said that both sets of US data “could sway expectations for when, and how fast, interest rates might come down. Markets are tentatively pencilling in two cuts next year, but we know from history that these predictions can easily change.”
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London’s premier index, the FTSE 100 (^FTSE), climbed 0.5% on Monday morning.
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Germany’s DAX (^GDAXI) gained 0.4%.
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In France, the CAC 40 (^FCHI) advanced 0.5%.
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The pan-European STOXX 600 (^STOXX) rose 0.5%.
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The pound was steady against the dollar (GBPUSD=X), trading at $1.3371 at the time of writing.
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Over in the US, contracts tied to the S&P 500 (ES=F) ticked 0.4% higher, while Nasdaq 100 futures (NQ=F) were up 0.3% and contracts tied to the Dow Jones Industrial Average (YM=F) gained 0.4%.
FTSE Index – Delayed Quote • USD
As of 9:57:13 GMT. Market open.
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City watchdog sets out mortgage reform plans
In other regulation news, the FCA unveiled plans on Monday to reform the mortgage market.
The City watchdog said that one area of focus for its reforms included first-time buyers and the self-employed, saying that it planned to simplify mortgage rules to allow more flexible products that reflect different working patterns and income levels at different stages of life.
The FCA also said that it planned to review retirement interest-only requirements to make them more accessible and explore ways to improve advice to help people plan for later life. The regulator plans to consult the public on proposed rule changes from early 2026 and have the first changes in place later next year.
David Geale, executive director for payments and digital finance at the FCA, said: “We have worked at pace this year to improve outcomes for customers wanting a mortgage. We’ll use insight from consumers and industry to drive further reforms and rebalance risk – helping to widen access to affordable mortgages to meet the needs of consumers today.
“Reforming the mortgage market can help address the fact that as a society we’re saving too little for later life, yet people have huge wealth tied up in property.”
Cryptocurrency firms will need to regulated by the UK’s financial watchdog from 2027, under new rules announced by the government.
The Treasury said on Monday that new legislation will come into force in 2027, which means that crypto firms will be regulated by the Financial Conduct Authority (FCA) in the same way as other providers of financial products.
Chancellor Rachel Reeves said: “Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world leading financial centre in the digital age.
“By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.
Yahoo Finance UK’s Pedro Goncalves writes:
The average asking price for newly listed properties fell by 1.8% in December, or £6,695, bringing the average to £358,138, as budget-related uncertainty weighed on activity, according to Rightmove.
However, the property site expects the market to rebound sharply over the Christmas period, with a larger Boxing Day surge in searches and new listings anticipated and a 2% rise in new seller asking prices forecast for 2026.
Alongside this optimism, the Bank of England’s (BoE) widely anticipated interest rate cut this week is expected to further buoy the property market. A reduction in rates would likely lead to more attractive mortgage deals, potentially revitalising buyer sentiment.
Financial markets are pricing in a greater than 90% probability that the BoE will announce a rate cut this Thursday, according to Laith Khalaf, head of investment analysis at AJ Bell. A cut would lower the base rate from its current 4% to 3.75%, the lowest level in nearly three years.
Read more on this story here.
Hello from London.
Vicky McKeever here — gearing up to bring you the economics and markets news of the day.
The spotlight this week is on interest rate decisions and a raft of economic data releases.
Let’s get to it.
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