The UK’s FTSE 100 edged lower on Thursday as investors awaited Britain’s economic figures for hints on the path of domestic monetary policy after the European Central Bank (ECB) signalled it may soon start to cut rates.

The blue-chip FTSE 100 (.FTSE), opens new tab closed down 0.5%.

British banking (.FTNMX301010), opens new tab and insurance (.FTNMX303010), opens new tab stocks fell the most, echoing a weak mood among European financial stocks after the ECB held rates at a record high as expected but pointed to rate cuts commencing soon.

The UK banks index fell 2.7%, recording its biggest percentage drop in almost two months.

Several heavyweights including Aviva (AV.L), opens new tab, Lloyds Banking Group (LLOY.L), opens new tab and Reckitt Benckiser (RKT.L), opens new tab also fell as they traded without entitlement for dividend.

“While inflation in other parts of the world has been surprising to the downside, U.S. inflation seems to be accelerating, and the question of who will ease policies first remains a key concern,” Alejandra Grindal, chief economist at Ned Davis Research, said.

“The positive news is that equities have, on average, shown similar gains a year after the first rate cut, regardless of whether it was initiated by the Fed or another central bank.”

Global equity markets have been choppy this week as investors pondered the outlook for global rates after hotter-than-expected U.S. inflation data tempered expectations the Federal Reserve would cut rates several times this year.

Eyes will be on Friday’s UK GDP figures as well as inflation and labour market data that could shape expectations around when the Bank of England (BoE) will start cutting rates.

Traders are currently pricing interest rate cuts of 43 basis points from the BoE by the end of 2024, and see the first cut coming in August.

In corporate updates, Darktrace (DARK.L), opens new tab surged 6.3% after the cybersecurity company raised its annual revenue and margin forecasts for the third time this year.