London, UK – London stocks eased on Friday, as the blue-chip FTSE 100 and the mid-cap FTSE 250 indices cooled off following a record-breaking rally in October. Investors remained cautious ahead of the Bank of England’s monetary policy decision next month and the UK government’s budget announcement later in November, which could include potential tax increases.

The FTSE 100 (.FTSE) ended the session 0.44% lower, while the domestically focused FTSE 250 (.FTMC) fell 0.47%. Despite the declines, both indices are positioned for monthly gains, with the FTSE 100 hitting record highs multiple times in October and the mid-cap index approaching a four-year high.

Sector Performance and Market Drivers

Pharmaceuticals, financials, and mining stocks led the sectoral performance for the month, supported by a strong start to the earnings season from companies like HSBC (HSBA.L) and GSK (GSK.L). Investors have been encouraged by signs of tame inflation, which raised expectations that the Bank of England may consider cutting interest rates later this year.

Global developments also supported market sentiment, including thawing U.S.-China trade tensions and dovish policies from the U.S. Federal Reserve, which boosted risk appetite among investors. While the Bank of England is expected to maintain its benchmark interest rate in November, markets are pricing in a potential cut in December.

“A more dovish-sounding Bank of England, particularly in light of the upcoming budget and potential tax increases, could be favourable for the FTSE,” said Fiona Cincotta, senior market analyst at City Index.

Company News

• Auto Trader (AUTOA.L) shares fell 3.4% after the company announced that its operations chief will step down, sparking investor concern over management changes.
• Fresnillo (FRES.L) lost 1.1% following the announcement that the gold miner has agreed to acquire Canada’s Probe Gold (PRB.TO) for C$780 million ($556 million) in cash, marking a strategic expansion into North American markets.

UK Housing Market and Pre-Budget Sentiment

Data from Nationwide indicated that UK house prices rose in October, signaling sustained demand in the housing market ahead of Finance Minister Rachel Reeves’ upcoming budget, which is expected to introduce tax adjustments. Rising property prices could influence both market sentiment and household financial planning, adding another layer of uncertainty for investors.