Spreadex Market Update
Bank of England leaves rates on hold
With the FTSE 100 having achieved significant gains, adding nearly 12 percent since the start of the year, it seems to be stabilizing at its multi-year peaks with an upward trend still intact. Injections of liquidity and interest rate cuts by world central banks have hit returns on bonds, driving investors to the better yields on offer on stock markets.
The bank of England has decided to leave rates on hold and resisted calls to extend its bond purchases. Policymakers have opted to wait and see if recent initiatives to boost lending will lift the struggling economy. Investors believe that the central bank is shifting its focus away from bond purchases towards schemes to support the flow of credit.
The European Central Bank has joined the Bank of England in refraining from cutting interest rates further and will wait until at least 2015 until further reductions are made. This is somewhat contradictory to what Draghi said on May 2nd ,declaring that the ECB remains ready to act again if required to do so
David Cameroon has made his clearest indication yet that he remains on course to defy several of his own party members by reaffirming his commitment to the EU. Referring to those who disagree as “pessimists”, Cameroon believes that it is possible to change and reform the EU, despite what some EU sceptics may believe.
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