The FTSE 100 index declined by 1.5% on Friday, September 18, 2026, as government bond yields rose following interest rate decisions from global central banks. The index ended the day down 157.01 points at 10,659.13, while other European markets, including the Cac 40 in Paris and the Dax 40 in Frankfurt, both fell 1.6%. These movements occurred as investors assessed the likelihood that persistent inflation would require interest rates to remain at higher levels for longer.
The market activity followed a series of central bank actions throughout the week. On Friday, the Bank of Japan raised its policy rate by 25 basis points to 1.25%, its highest level since 1995. This followed a rate hike by the U.S. Federal Reserve earlier in the week. The Bank of England (BoE) opted to hold interest rates steady during its meeting on Thursday, September 17, 2026. However, analysts from Panmure Liberum and RBC Capital Markets updated their forecasts on Friday to include a 25 basis point hike at the BoE’s next meeting in November.
In the bond market, the yield on the U.S. 10-year Treasury rose to 5.01% from 4.95%, while the UK 10-year gilt yield increased to 5.31% from 5.21% on Thursday. A yield is the annual return an investor receives for holding a government bond. Energy prices also influenced market sentiment, with Brent oil rising to $104.37 a barrel on Friday. Analysts at Morgan Stanley noted that higher oil prices could slow the process of disinflation and weigh on growth in 2027.
Corporate news also contributed to index fluctuations. Airtel Africa shares fell 11% following a report that its Airtel Money division is considering a valuation of $8 billion to $9 billion for its planned London initial public offering, down from a previous target of $10 billion. Glencore shares declined 4% following a Financial Times report that the miner suspended Peter Hill, head of steelmaking raw materials, pending a review of business dealings with iron ore trader Radiant World.
What happens next depends on upcoming economic data and central bank meetings. Investors are monitoring for "second-order impacts" where high energy costs lead to broader price increases. The next UK Monetary Policy Committee meeting is in November. In Japan, markets will be closed on Monday, September 21, for a public holiday, while global markets will watch for an interest rate decision from China the same day. Airtel Money could file for its London listing as early as next week, with trading targeted for October.