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The Bank of England’s long-running fight against inflation will today see interest rates hit at least 5.25%. It will be the 14 consecutive meeting that policymakers have voted for an increase, with today’s options split between a 0.25% rise or half point increase to 5.5%. The Bank will also publish its latest projections for the UK economy.
Shares in the housebuilding sector fell again today after Barratt Developments revealed a drop in its average sale price. The update amid the impact of higher mortgage costs came as it emerged that the UK GDP declined 0.1% during May. Demand for luxury timepieces “continues to outpace supply”, retailer Watches of Switzerland said, as years-long waiting lists for its most in-demand timepieces got even longer, despite it raising prices.
The FTSE 100 started flat today, as housebuilders declined while the travel sector performed well. Ever-increasing peak interest rate expectations upped the pressure on building stocks, while travel was boosted by optimistic updates from two of Europe’s leading low-cost airlines. Meanwhile Sainsbury’s insisted it was leading on the fight against inflation, having cut prices for products like spaghetti bolognese and toilet paper.
The FTSE 100 has started with modest gains today, led by miners, after a strong finish to an otherwise-disappointing June. Markets will keenly await purchasing managers’ index data from the manufacturing sector for the UK and Europe, which will be released later this morning.
Tesco’s latest sales update and a profit warning by Travis Perkins are among key developments in the City today. The FTSE 100 index is higher after US markets maintained their strong run last night on hopes that interest rates have nearly peaked. In contrast to elsewhere, Japan has maintained its ultra-loose approach to monetary policy by leaving its short-term interest rate at -0.1%.