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FTSE 100 down 0.4%, FTSE 250 falls 0.5%

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Bank of England holds rates in knife-edge vote

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AstraZeneca's ( AZN ) gains on strong Q3 profit

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Sainsbury's ( JSNSF ) rises after lifting FY profit outlook

(Updates with closing prices)

Nov 6 (Reuters) -

London's main stock indexes pulled back on Thursday as the

pound strengthened following the Bank of England's decision to

keep interest rates steady ahead of the government's budget,

while investors also digested a flurry of corporate earnings.

The blue-chip FTSE 100 index closed 0.4% lower,

retreating from a record high it hit a day earlier.

The midcap index fell 0.5%, reflecting broader

risk-off sentiment.

While the Bank of England

kept borrowing costs unchanged

, as widely anticipated, the narrow margin in the vote and

signals that Governor Andrew Bailey might soon join those

advocating for monetary easing have increased expectations for a

rate cut in December after the budget announcement later this

month.

"The Bank will be in a stronger position after the dust

settles from the budget, armed with additional jobs and

inflation data, to judge whether further easing is warranted in

December," said George Brown, senior economist at Schroders.

Still, sterling found its footing after hitting

multi-month lows in the previous session, climbing 0.45%

following the BoE decision.

Across London markets, industrial stocks

emerged as the main drag, with the sector declining 1.8%. The

aerospace and defence sector also struggled,

shedding 2.1%.

Oil and gas companies' shares lost ground as oil prices

fell, with BP ticking 0.5% lower and Shell down

0.4%.

Heavyweight AstraZeneca's ( AZN ) 3% gains provided support

for the pharma sector as the drugmaker reported

better-than-expected third-quarter profit, boosted by strong

sales in cancer and heart-related drugs.

Smith & Nephew PLC plunged 10.8% after it missed

market expectations for quarterly revenue due to weakness in its

U.S. knee implants business.

The banking index gained 0.8%, with Standard

Chartered ( SCBFF ) and Barclays PLC ( BCS ) up 1.5% and 1%,

respectively.

The Financial Times reported that finance minister Rachel

Reeves was set to spare them from a punitive budget tax raid.

Among other notable movers, Britain's second-largest

supermarket group Sainsbury gained 5.5% after raising

its full-year profit outlook.

Diageo ( DEO ) fell 6.5% after trimming its 2026 sales

and profit forecast.