London's FTSE 100 hits new peak as soft jobs data raises rate cut bets

Tue, 17th Feb 2026 17:40

Feb 17 (Reuters) - Britain's FTSE 100 ‌closed at a new peak on Tuesday, as signs of a cooling British labour market raised hopes of ⁠an interest rate cut next month, while a drop ⁠in metal prices pressured mining stocks.

The blue-chip FTSE 100 rose 0.8% to 10,556.17 points, marking a record high, while the mid-cap FTSE 250 rose 0.8% to trade at a four-year high.

Britain's unemployment rate rose to 5.2%, its highest in over a ‌decade outside the pandemic, while wage growth cooled again, according to Office for National Statistics data.

Sterling dipped 0.6% against the dollar as investors priced in a roughly 80% chance of a quarter-point Bank of England rate cut, up from 65% on Monday.

"We expect two rate cuts by summer, one in March and another in June, which fits with a gently weakening labour ‌market and softer inflation that should allow the Bank of England to support the economy," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"Part of ‌the FTSE's outperformance today reflects the expectations that the Bank of England will give further support to the UK economy."

January consumer prices data on Wednesday could offer more clues on the bank's monetary policy path.

Meanwhile, geopolitical tensions eased somewhat as Iran and the United States reached an understanding on main "guiding principles" in ‌talks aimed at resolving their nuclear dispute.

Defence stocks came under pressure on expectations of weaker demand, while precious-metal miners dipped 2.8% amid a softer appetite for safe-haven assets.

Miner Antofagasta posted a 52% jump ⁠in annual ⁠core profit, but its shares dropped 3.4% on weak copper prices.

Technology ‌stocks rose 2.2% following last week's artificial intelligence-related turbulence in global markets, with information group RELX and credit analytics firm Experian up more than 2% each.

Plus500 fell 5.2% after the multi-asset trading platform said its CEO, ‌CFO and CMO would sell an aggregate 1.5 million shares of the company.

InterContinental Hotels Group rose 1.1% after the Holiday Inn-owner posted fourth-quarter global revenue per available room above market expectations. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Harikrishnan Nair and Chris Reese)