Yesterday there was little reaction in the markets to the unsurprising news that the Bank of Engand (BoE) was holding interest rates at 5.25%.
It followed the European Central Bank (ECB) and US Federal Reserve also pausing interest rate rises over the past few days.
However, the BoE did take a relatively hawkish stance overall and in its Monetary Policy Report. Not only did three members of the nine-person Monetary Policy Committee (MPC) vote for another rate rise, but the governor Andrew Bailey said that the MPC would watch out for the need for further rate rises, and: “It’s much too early to be thinking about rate cuts.”
He also said that he expects inflation to be below 5% in its next reading and that there is 50-50 chance of recession next year.
The pound lost around half a cent against the euro before and after the decision, until the markets caught up with the hawkish comments and GBP/EUR revived. Sterling recovered a little against the US dollar.
The promise of an end to rate rises was good news for the stock markets, however, with the FTSE 250 strengthening by 3%.
Elsewhere in business news, in New York the cryptocurrency wunderkind Sam Bankman-Fried was convicted of fraud and faces decades in prison. As the US attorney said: “the cryptocurrency industry might be new… this kind of corruption is as old as time”
In the UK, a more successful/luckier new-tech magnate Elon Musk was in conversation with UK prime minister Rishi Sunak. Musk said that artificial intelligence (AI) would eventually render all jobs obsolete.
In the meantime, enjoy your weekend!
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