LONDON, July 9, 2025 — The UK economy is navigating a challenging landscape of subdued growth and heightened global uncertainty, according to the Bank of England’s latest Financial Stability Report. Despite a cautiously optimistic tone from the Bank, the FTSE 100 index saw modest gains, driven in part by significant corporate developments.
The Bank of England’s Financial Policy Committee (FPC) warned of weaker and more uncertain growth for 2025, citing rising geopolitical and trade tensions. The Monetary Policy Committee (MPC) maintained the base interest rate at 4.25%, with potential cuts expected later in the year. Inflation stood at 3.4% in May, slightly down from April but still above the Bank’s target.
The FTSE 100 closed at 8867.02, up 0.15% from its opening, as investors reacted to the Bank’s report and corporate news. Merck’s $10 billion acquisition of Verona Pharma plc was a major market mover, with Verona’s American Depository Receipts surging on the news. The deal is expected to strengthen Merck’s cardio-pulmonary pipeline.
Several major UK companies are undergoing significant strategic shifts:
- BP is pivoting back to hydrocarbons, reopening its Tripoli office and exploring new opportunities in Libya.
- WPP faces headwinds, downgrading its full-year guidance and undergoing a leadership transition.
- Jet2 is focusing on customer acquisition and digital enhancement, leveraging big data and AI to improve customer behavior intelligence.
- Seven major housebuilders have agreed to pay £100 million towards affordable housing programs, following a Competition and Markets Authority investigation.
The UK economy remains resilient despite global uncertainties, with key players adapting to evolving market conditions and competitive pressures.
