The FTSE 100 Closed at 10,673.94. Monday Is the First Full Session at 4%

The FTSE 100 closed on Friday at 10,673.94, down 108.72 points from Thursday's 10,782.66. That is a fall of 1.01 per cent, milder than the reading at mid-morning, when the index was about 1.5 per cent lower, and milder again than a Reuters snapshot at 11.43 GMT, when it stood at 10,540.78, down 2.2 per cent. The day's range ran from 10,528.07 to 10,784.16. London is closed on Sunday. Monday is the first full session in which traders can respond to that close with Bank Rate already at 4 per cent.

The selling was the aftershock of a technology rout in the United States and Asia, and of a question that has nothing to do with Threadneedle Street: whether spending on artificial-intelligence data centres keeps its pace. Dan Coatsworth, head of markets at AJ Bell, said the AI story risked moving to a lower gear. BT Group fell 6.4 per cent. Sage and Next each lost 3.2 per cent. International Airlines Group rose 1.5 per cent. Drugmakers had already been marked down in the morning on the fear that slower AI spending means slower gains in discovery. The Stoxx 600 had its worst day since July on the same theme.

The rate rise is now a fact, not a forecast

Thursday's decision is no longer something the market is waiting to be told. The Monetary Policy Committee voted 8 to 1 to lift Bank Rate from 3.75 per cent to 4 per cent, the first increase since August 2023. Catherine Mann wanted 4.25 per cent. Andrew Bailey said the rise should not be read as the start of a long sequence, and also that, unless the conflict in the Middle East eases, it is unlikely to be the last. The next meeting is on 17 December. Friday morning's note caught the index while it was still falling. The close shows it recovered about half of the worst of that drop and still ended the week in the red.

Households meet the same decision in a different place. About 500,000 tracker mortgages pick up roughly 31 pounds a month. Two-year fixed rates are already up nearly 50 basis points since the start of September, on the Bank's own account. The Lloyds house price index, published into Friday morning, put the average price at 296,285 pounds, down 0.6 per cent in October and 1.2 per cent on the year. None of that trades on a Sunday. All of it is the backdrop when the cash market reopens.

A jobs number from Washington, and a quiet City

The other Friday print was American. The Bureau of Labor Statistics said payroll employment rose by 165,000 in October and the unemployment rate was 4.1 per cent. August was revised up to 186,000 from 133,000, and September to 60,000 from 29,000. A labour market that is still adding jobs gives the Federal Reserve less reason to rush, which matters for the same technology shares London was marking down. It does not rewrite the Bank of England's energy forecast. Staff still expect UK inflation around 5 per cent by the middle of 2027 if the oil shock from the Iran war persists.

Brent was back under 98 dollars on Friday morning, near 97.93, after a week in which it fell sharply from above 110. A cheaper barrel and a dearer Bank Rate pulled in opposite directions, and equities followed Wall Street. Monday's open will show which of those forces the City still trusts. Until then the number that stands is 10,673.94, and the rate that stands is 4.