Spreadex Market Update

Is the Bank of England preparing for an interest rate hike?



The BoE have a crucial decision on their hands after inflation figures remain high. Inflation is already 1.1% above their target level of 2%, plus we have seen a much better than expected economic recovery from the pandemic.

Could this mean we are about to see a rate increase from the current record lows of 0.1%, and if so, by how much?

FTSE hits low of -0.52% not only due to worries over interest rates, but also thanks to large oil companies losing ground despite rising gas and oil prices. With BP and Shell both dropping by 3.1% and 2.36% respectively.

However, this is not expected to last as both companies are posting high profits for the year so far.

Investors seem to be bracing themselves not only for the BoE decision tomorrow, but also keeping a keen eye on the Federal Reserve for news on bond purchase tapering today at 6pm.

In fact, US markets closed on Tuesday at a record high ahead of the key speech, as many expect to see a strong rally in the dollar index. US equity markets are also expected to respond positively to this news.

Currently US markets are treading water, presumably in anticipation on the imminent news.

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