FTSE 100 falls 157 points as surging bond yields stoke fears of fresh UK interest rate hikes

From the Newshound archive · first published 19 September 2026.

London's stock market took a sharp hit on Friday, with the FTSE 100 closing down 1.5% at 10,659.13 as gilt yields jumped to 5.31% from 5.21% in a single day. The Bank of Japan hiked rates hours after the US Federal Reserve, piling pressure on central banks globally, while the Bank of England's Thursday hold looks increasingly short-lived. Panmure Liberum's Simon French now expects two 25 basis point UK rate increases, warning household energy prices are on track to rise 25% in January. RBC Capital Markets has also revised its Bank of England call, adding a November hike to its forecasts.

Analysts warn a January energy price jump of 25% risks stoking a second wave of inflation that could force the Bank of England to keep hiking.

Banks bore the brunt of the London sell-off, with Lloyds dropping 2.9% and HSBC falling 1.6% on fears that elevated rates will squeeze margins.

Airtel Africa crashed 11.3% after reports emerged that its Airtel Money unit is considering downsizing its planned London IPO.