The FTSE 100 Live index traded lower on Thursday as weakness in UK banking shares offset modest gains among industrial and consumer stocks. Investors also looked ahead to key US inflation data that could provide further clarity on the Federal Reserve’s interest rate outlook.

Banks Drag Down FTSE 100

Concerns over the potential for a windfall tax on banks put pressure on the financial sector. NatWest was among the sharpest fallers, sliding 4% to £515.6, while Lloyds Banking Group declined 3% to £80.1. Among international lenders, Barclays dropped £9.25 to £359.4 and HSBC eased £8.1 to £947.7.

The weakness left the blue-chip index down 8.83 points at 9207.99, extending the cautious tone that has dominated London trading this week.

On the positive side, Rentokil Initial gained £6.6 to £362.6, Rolls-Royce advanced £12 to £1070.5, and BP added £4.25 to £433.35, helping to soften the broader decline.

Frasers Appoints Sir Jon Thompson as Chair

In corporate news, Frasers Group announced the appointment of Sir Jon Thompson, the former head of the Financial Reporting Council, as its new chair. He succeeds David Daly, who will step down after eight years on the board.

Sir Jon Thompson, who joined the retailer as a non-executive director in June, is set to assume the position formally on Monday, while Mr Daly will depart at the company’s annual general meeting on 24 September. 

The move signals a governance refresh at the retailer, founded by Mike Ashley, as it seeks to strengthen its board leadership.

Spotlight on US Inflation Data

Attention also turned to the US, where personal consumption expenditure (PCE) figures for July are due later today. The data, closely monitored by the Federal Reserve, is expected to show core PCE inflation rising to 2.9% year-on-year, slightly above the previous month’s 2.8% and still well above the Fed’s 2% target.

Markets currently price in an 85% chance of a Fed rate cut in September, with debate focusing on whether policymakers will follow up with another reduction before year-end.

Derren Nathan, head of equity research at Hargreaves Lansdown, noted that investors are also watching the impact of US tariffs on goods prices. “If inflation comes in hotter than expected, the path towards a December rate cut will become less clear,” he said.

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Global Market Context

Wall Street continued its strong run, with the S&P 500 closing above 6,500 for the first time on Wednesday. Gains were supported by upward revisions to US GDP growth, boosting confidence in the economy’s resilience. The Dow Jones added 0.2%, while the Nasdaq Composite rose 0.5%.

In contrast, the FTSE 100 Live today witnessed underperforming global peers grabbing headlines, reflecting local pressures including political debate over bank levies and corporate governance changes.