As the Fed dampens sentiment ahead of the BoE, the UK's FTSE drops to a one-month low.

Both the FTSE 100 and FTSE 250 midcap indexes saw a 1% decline. At 1200 GMT, the BoE is anticipated to hold rates at the policy decision. UK gilt yields and sterling are rising. Fears of slower-than-expected rate decreases cause homebuilders to decline. Water utilities benefit after a 36% increase in water billsDecember 19, Reuters As the U.S. Federal Reserve's overnight forecast of a slower path of interest-rate decreases lowered investors' risk appetite globally, the UK's flagship FTSE 100 stock index fell 1% and returned to its close to one-month low on Thursday.was down 1% as of 0900 GMT, reaching its lowest level since Nov. 21. This was just two days ago, mirroring the day's decline in European and Asian markets as well as Wall Street's decline the day before.

Ahead of Donald Trump's second term in the White House next month, the Fed's new predictions called for two 25-basis-point rate reduction in the next year due to growing inflation. Policymakers expressed concerns about inflation possibly rekindling, which may keep rates higher for longer. They anticipate slightly greater economic growth and lower unemployment next year.Additionally, a rise in British gilt yields and a stronger pound sterling continued pressure on UK stocks. Ahead of a local monetary policy announcement at 1200 GMT (7:00 a.m. ET), where the Bank of England is anticipated to maintain rates at their current levels, investors were also on edge. The top of the watch list will be any clues on the direction of policy going forward, particularly in light of this week's impressive wage statistics. Fears of a slower-than-expected pace of rate cuts caused Homebuilders (.FTNMX402020), which opens a new tab, to drop 1.6%. Lenders (.FTNMX301010) and investment banking sub-indices (.FTNMX302020) both saw losses of more than 1% during a general market downturn.