June 20 (Reuters) – London stocks edged higher on Thursday, as the Bank of England kept rates on hold as expected, while hopes increased for a rate cut in August after Governor Andrew Bailey cheered inflation’s return to the 2% target.
The blue-chip FTSE 100 (.FTSE), opens new tab rose slightly after the decision, gaining 0.4% to a more than a week-high and set to register a third straight day of gains.
The mid-cap FTSE 250 (.FTMC), opens new tab was up 0.4% at 20,461.46.
The BoE’s Monetary Policy Committee voted 7-2 to keep rates at a 16-year high of 5.25% ahead of a July 4 election.
Governor Bailey said it was “good news” that inflation is back at 2%. He added the bank “needs to be sure that inflation will stay low” before cutting rates.
Markets now see a 45% chance of a rate cut in August, compared with 30% before the rate decision. 0#BOEWATCH
The pound slipped 0.2% against the U.S. dollar and was last at $1.2687. The UK’s 5-year gilt…
