Yahoo Finance FTSE 100 Live: Index closes up 100 points after Bank of England holds interest rates
The Bank of England's Monetary Policy Committee held interest rates as expected today, with members voting 6-3 in favour of another pause.
The FTSE 100 is set to open higher after US shares surged after last night's Fed decision.
FTSE closed up 100 points
Thursday 14 December 2023 16:42 , Daniel O'Boyle
The FTSE closed at 7,648.98 today, up 100 points.
At one stage, London's top flight looked to be on for its best day of the year, hitting as high as 7724 after the US Federal Reserve sparked global rate-cut hopes last night. But a more-hawkish-than-expected hold from the Bank of England cooled the buying spree.
The rate-sensitive Ocado was the biggest riser of the day, joined by Ashtead and Entain. A truncated fallers list was led by data and publishing group Relx.
City Spy: Issa brothers in £500 billion accounting error
Thursday 14 December 2023 16:06 , Daniel O'Boyle
City Spy notices something doesn't quite add up wit the Issa Brothers' accounts
The Issa brothers’ debt levels have been a hot topic in the business press for some time.
But Spy was taken aback to find out just how steep they are.
In recent annual accounts, one of their firms, EG Finco, claims to have taken out a "Tranche B Euro loan of €591,042m" or about half a trillion pounds. Could this be the biggest corporate debt deal in history?
Or sig up at standard.co.uk/newsletters
City Spy is back!
Thursday 14 December 2023 14:21 , Daniel O'Boyle
After a prolonged Covid hiatus the notorious City Spy has finally made a return, reincarnated as a newsletter, and we couldn't be more excited for its relaunch.
Sign up here: https://www.standard.co.uk/newsletters
Will BoE be late to the rate cut party?
Thursday 14 December 2023 14:08 , Daniel O'Boyle
Ruth Gregory, deputy chief UK economist at Capital Economics, says: "The Bank of England sprung no surprises, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. While the recent soft wage and inflation data mean the Bank may not wait as long as our forecast of late in 2024 to cut rates, we are still convinced that the Bank will cut rates later than the Fed (Q1 2024) and the ECB (Q2 2024) and current UK market pricing of May. And we still think that when rates are cut, they will be reduced to 3.00% by the end of 2025 rather than to 3.50% as investors anticipate."
Many employees not aware of new day one right to request flexible working
Thursday 14 December 2023 14:06 , Daniel O'Boyle
More than two thirds of workers are not aware they will have a right to request flexible working from their employer from day one of their job next year, new research suggests.
The conciliation service Acas said it will produce a new statutory code of practice next year for employers and workers on handling requests for flexible working.
Staff who have worked for their employer for 26 weeks or more currently have the right to ask if they can work flexibly.
ECB follows Bank of England in holding rates
Thursday 14 December 2023 13:23 , Daniel O'Boyle
Like the Bank of England and the US Federal Reserve, the European Central Bank has also held rates.
Richard Garland, Chief Investment Strategist, Omnis Investments, said : “The ECB was unlikely to change the deposit rate in this meeting, so there are no surprises here, but like the Bank of England they are keen to manage market expectations as to future rate cuts. Recent sharp falls in inflation are making that job harder and at least for now, central banks being ignored in their efforts to tame market expectations for rate cuts in 2024.”
BoE 'unable to drop tightening bias'
Thursday 14 December 2023 12:26 , Daniel O'Boyle
Michael Metcalfe, Head of Macro Strategy, State Street Global Markets, comments on the BoE interest rate decision: "The BoE may face a much weaker growth outlook than the Fed, but they have been unable to drop their tightening bias in November. Three members still voted an immediate hike and the decision to hold or hike rates remains finely balanced.
"Clearly, the BoE needs to see greater progress on inflation to effectively signal that rates have finally peaked. With the BoE potentially lagging rate cuts elsewhere early next year, this will provide further impetus for asset managers to continue to eliminate their still sizeable sterling underweight."
MPC voter breakdown
Thursday 14 December 2023 12:18 , Daniel O'Boyle
All nine MPC members voted the same way today as they did in November
Bailey: We've come a long way, but further to go
Thursday 14 December 2023 12:06 , Daniel O'Boyle
Commenting on the interest rate decision, Andrew Bailey, Governor of the Bank of England said: "Today we've decided to hold interest rates at 5.25%. We've come a long way this year, and successive rate increases have helped bring inflation down from over 10% in January to 4.6% in October. But there is still some way to go. We'll continue to watch the data closely, and take the decisions necessary to get inflation all the way back to 2%."
Inflation decline still too slow for Bank
Thursday 14 December 2023 12:04 , Daniel O'Boyle
Jeremy Batstone-Carr, European Strategist at Raymond James Investment Services, says: “Despite easing inflation pressures, the Bank of England’s decision to hold the base rate at 5.25% shows that the reduction in inflationary pressures remains too slow for the Bank’s liking.
“This is the third successive policy meeting resulting in a standstill base rate, as the Bank continues to await sustained drops in inflation. The Monetary Policy Committee (MPC) may enact a change in course come 2024, though the lagged impact of earlier rate hikes will still be making their way through the economy, likely leading to flatlined activity for most of the new year before a partial upturn.
“Today’s decision comes in advance of next week’s CPI data, which will paint a clearer picture of the impact of inflation on the nation. For now, we remain at the peak of the rate hiking cycle.”
BoE holds rates in 6-3 vote
Thursday 14 December 2023 12:00 , Daniel O'Boyle
As expected, the Bank has voted to hold interest rates at 5.25%.
Like in November, the vote was 6-3.
Five minutes until BoE call: Hold still widely expected
Thursday 14 December 2023 11:54 , Daniel O'Boyle
Five minutes ahead of the Bank of England's decision, a hold is seen as overwhelmingly likely.
However, markets are pricing in a slim chance of a hike, at 5%.
With a hold seen as close to certain, closer attention will be paid to the vote count. In November, the MPC vote was 6-3 in favour of a hold.
Rate cut hopes have the City in party mood, but beware of inflation hangover
Thursday 14 December 2023 11:48 , Daniel O'Boyle
Ahead of the Bank of England's decision today, Jonathan Prynn says inflation isn't out of the bottle just yet
Financial markets were swigging the Christmas sherry today after Fed chairman Jerome Powell effectively declared an end to the painful cycle of monetary tightening that has put a dampener on the global economy for two years now.
The Dow hit a new all-time high, while over here the FTSE 100 put on more than two per cent as relief swept through trading floors in the City and Wall Street.
While it is great to feel a bit of optimism for a change, particularly at this time of year, it might be wiser for the markets to keep the champagne on ice for a while yet.
Mortgage lenders cut rates as gilt yields tumble
Thursday 14 December 2023 11:23 , Daniel O'Boyle
Leading lenders scrambled to slash mortgage rates today as gilt yields fell sharply after the US Federal Reserve pencilled in at least three cuts next year.
HSBC, Virgin Money and TSB were among big high street names pushing through pre-Christmas reductions in the price of their fixed rate homes loans in a boost for property buyers.
More cuts from lenders are expected over the coming days as the mood in the markets shifted rapidly from fear of a prolonged period of high rates to exuberance in anticipation of sharply falling borrowing costs next year.
FTSE 100 up 2% amid surge in risk appetite, Mobico up 10% in FTSE 250
Thursday 14 December 2023 10:30 , Graeme Evans
London’s FTSE 100 index today bounced 2% and rate-sensitive stocks by as much as 7% after global markets were handed a huge pre-Christmas boost.
The buying spree followed a long-awaited pivot in monetary policy after the US Federal Reserve signalled a faster-than-expected pace of US interest rate cuts in 2024.
Wall Street’s Dow Jones Industrial Average last night surged to a record high and the US dollar fell sharply as traders bet on a first downward move as soon as the spring.
With worries fading over higher-for-longer borrowing costs, the FTSE 100 index shed the caution of recent sessions by lifting 158.29 points to its highest level since September at 7706.73.
The improved risk appetite in London meant a big rally for grocery warehouse technology business Ocado, which jumped 42.6p to 686.4p, and for Ladbrokes owner Entain after a gain of 58p to 904.6p.
Investors also returned to the property sector, with Piccadilly Lights owner Land Securities above 700p for the first time in almost a year after a rise of 66p. Warehouse logistics firm Segro also put on 6% or 51.6p to 896p.
The gold price, which tends to improve when the US dollar declines and interest rate expectations fall, returned above the $2000 an ounce threshold to boost a number of London-listed mining stocks.
They included West Africa-focused Endeavour Mining, which surged 134p to 1827p and Mexico’s Fresnillo with a rise of 41.2p to 609.8p.
Hopes of a soft landing for the US economy triggered a rebound for the North America-focused equipment hire firm Ashtead, which put on 352p to 5332p.
A stronger pound added an extra dimension to the performance of the FTSE 250 index, with the UK-focused benchmark up 3% or 566.42 points to 19,262.18.
Housebuilder Persimmon, which lost its top flight status earlier this year as mortgage costs rose and sapped demand, put back 6% or 78.2p to 1363.7p.
And National Express owner Mobico cheered 10% or 6.7p to 71.5p, having recently suspended dividend payments in order to focus on rebuilding its balance sheet.
From sorrow to joy at MusicMagpie
Thursday 14 December 2023 09:33 , Daniel O'Boyle
Struggling phone reseller MusicMagpie showed signs of a turnaround today, as a record Black Friday allowed the firm to upgrade its full-year profit guidance.
Revenue for the year to 30 November fell to £136.6 million, but the end of the period was stronger after a weak first half. The firm now expects underlying profits to grow to £7.5 million, from last year’s £6.5 million.
Boss Steve Oliver said: “I remain confident in the business and our ability to navigate the difficult external market conditions.”
The shares soared by 25% to 14.4p, but that still leaves them 40% below where they started the year and down 93% from 2021’s float price.
Shein accused of mafia-style behaviour in fresh lawsuit
Thursday 14 December 2023 09:30 , Simon Hunt
E-commerce giant Shein has been accused of “mafia-style intimidation” and “false imprisonment of vendors” by rival Temu in a fresh US lawsuit that threatens to derail its bumper $90 billion IPO plans.
In published court filings, Temu accused Shein of having “gone so far as to falsely imprison merchants doing business with Temu, including detaining merchant representatives in Shein’s offices for many hours while Shein confiscates the merchants’ electronic devices, obtains access to proprietary Temu information through the merchants’ seller accounts, and threatens the merchants with penalties for doing business with Temu.”
“Just as a mafia organization might support local charities to conceal its illegal behavior, Shein hides behind a deceptive public image in the United States,” the firm said.
Shein last month filed for a listing in New York which could value the Chinese tech firm at as much as $90 billion. It has reportedly also been in talks with the London Stock Exchange.
Shein did not respond to a request for comment.
Market snapshot as FTSE gains 160 points
Thursday 14 December 2023 08:59 , Daniel O'Boyle
Take a look at today's market snapshot after a huge surge for London shares
FTSE 100 jumps 1.9% on rates cheer, Ocado up 9%
Thursday 14 December 2023 08:24 , Graeme Evans
The FTSE 100 index has surged 1.9% after the Federal Reserve pointed to a faster-than-expected pace of interest rate cuts in 2024.
Shedding the caution of recent sessions, London’s top flight stands at its highest level in three months following a gain of 145.17 points to 7693.61.
Rate-sensitive stocks drove the improvement as Ocado surged 9% or 55.8p to 700p and central London landlord Land Securities lifted 41p to 704.2p.
The FTSE 250 index surged 2.7% or 508.29 points to 19,204.05, with the shares of housebuilder Persimmon up 5% and British Land 6% higher.
Currys UK sales slide, but Nordics show recovery
Thursday 14 December 2023 08:17 , Daniel O'Boyle
urrys’ UK and Ireland sales slid in six months to 28 October, but the group cut its losses as it took steps to revive its ailing Nordic arm.
UK sales came to £2.22 billion, down 3%, which the business said was mostly due to “deliberate actions to prioritise profits over sales”, as it aimed to cut £300 million of costs.
The business has faced difficulties in the post-pandemic era as its Nordics arm struggled, but it appeared to be getting that business back on track as profits in the region grew.
Shares are up 10.6% to 50.1p. They’re still down 12% for the year.
Richard Hunter, head of markets at Interactive Investor, said: “Much has been done, but much remains to do. The group has stated that it wishes to continue its momentum in the UK, repair the Nordics operation and strengthen its balance sheet, and in this period has begun to achieve some or all of those objectives. As such, the share price has reacted strongly to the potential for improvement, while on a valuation basis, the shares remain cheap by historical standards.
“Even so, today’s bounce cannot mask the fact that the shares have lost 32% over the last year, as compared to a decline of 1.8% for the wider FTSE250, and are down by 63% over the last two years. The market consensus of the shares as a hold could see some upward revision, although there will still be those investors who wish to remain on the sidelines until any recovery becomes entrenched.”
Thames Water picks former Aggreko boss Chris Weston as next CEO
Thursday 14 December 2023 07:50 , Michael Hunter
Thames Water has revealed the identity of its next CEO.
Chris Weston, the former boss of FTSE 250 power hire firm Aggreko, will lead the troubled, 15-million customer utility, which is struggling with a major debt-burden.
He takes over as the first permanent appointment since the sudden departure of Sarah Bentley in June, amid a public outcry over leaking water mains and the discharge of sewage into rivers.
Weston, a keen fisherman, will be paid an annual salary of £850,000 and will be in a bonus scheme that can pay out up to 156% of his salary.
Thames' debts are in the region of £15 billion, creating concern about its financial viability at a time of rising interest rates, and when ageing infrastructure requires heavy investment.
Weston has military experience, serving with the Royal Artillery from 1983 to 1989.
He said today: "I recognise that this business is critical to both society and the UK and how important it is that we restore confidence in our operations and financial position.
"I am looking forward to joining Thames Water at this crucial time for the business and the wider water sector. Working with the team I will be focused on delivering the turnaround that the business has outlined and improving performance over the next few years."
Wall Street rallies on US rate cut forecasts, FTSE 100 seen higher
Thursday 14 December 2023 07:23 , Graeme Evans
The FTSE 100 index is set to open 1% higher after Federal Reserve policymakers last night indicated the potential for three interest rate cuts in 2024.
Their dot plot projections were released alongside the central bank’s latest decision keeping rates at a 22-year high of 5.25-5.5% for the third meeting in a row.
Wall Street shares rallied and the US dollar fell following the guidance, which also included a downward forecast revision to the Fed’s preferred measure of inflation.
Deutsche Bank strategist Jim Reid said: “Yesterday’s meeting did its best to give investors an early Christmas present, all packaged with a bow and extra special gift wrapping.
“One change to a dot plot doesn’t automatically completely change the direction for the economy but the risks that the Fed stubbornly holds in restrictive territory while the lag of policy hits has been reduced by their change of tone.”
All three leading Wall Street benchmarks rose by 1.4% to extend their strong performances for the year.
CMC Markets expects the FTSE 100 index to open 72 points higher at 7620 as attention turns to announcements by the Bank of England and European Central Bank.
Yesterday's top stories
Thursday 14 December 2023 07:15 , Daniel O'Boyle
Good morning from the City desk at the Evening Standard. Here's a selection of some of our top stories from yesterday:
GDP sees larger than expected 0.3% slump in October. Big rate cuts now seen as likely in 2024
Ladbroke and Coral owner Entain boss Jette Nygaard Andersen quits after activist shareholder pressure
Zara owner Inditex sees bumper sales and profits growth in first nine months of 2023
We Work enjoyed bumper November despite bankruptcy as London workers returned to offices
Saucepan to cutlery seller ProCook blames volatile conditions & teething issues with website relaunch on 3.8% sales fall to £26.3m
Lord Ashcroft’s tech recruitment firm Impellam agrees £483 million takeover from Dutch rival
Revolution Beauty CFO quits as firm reaches settlement on payout to cofounder
St James wine merchant Berry Bros & Rudd delivers 11% sales increase to £254 million in its 325th anniversary year
