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Markets brace for Bank of England interest rate decision – business live | Business

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Introduction: Bank of England interest rate decision looms

Governor of the Bank of England Andrew Bailey last month.
Governor of the Bank of England Andrew Bailey last month. Photograph: Reuters

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Over to you, governor. After America’s central bank announced its largest interest rate rise since 1994, the Bank of England must now decide whether, and how fast, to lift UK borrowing costs.

Governor Andrew Bailey and colleagues on the Bank’s Monetary Policy Committee faced a difficult decision at this week’s meeting, with the economy slowing sharply and inflation heading towards double-digit levels.

The MPC are very likely to lift Bank Rate, currently 1%, at noon today – and some economists believe we could get the first 50 basis point increase since 1995, which would take rates to 1.5%.

BoE later…imo should do 50, but will probs do 25 judging by recent MPC comments/last vote…inflation & growth outlooks both worsening…cautious tone won’t help £ which will import more inflation…dug themselves into a v deep hole now & tough to see how they get out…

— Michael Brown (@MrMBrown) June 16, 2022

Conall MacCoille, chief economist at wealth managers Davy, believes there are compelling reasons for the BoE to raise interest rates by as much as 50bps.

“CPI inflation at 9% and a tight labour market are creating a risk that employee price expectations could become entrenched.”

Furthermore, MacCoille points out that some Bank policymakers wanted a larger rise last month.

“The MPC’s vote was split 6-3 in May, with the minority favouring a 50bps rise in interest rates”.

James Lynch, fixed income manager at Aegon Asset Management, reckons the committee could split into three camps, making a smaller 25bp rise more likely.

The dovish view can be emboldened by the slowdown in GDP growth, the hawkish camp encouraged by the labour market strength/higher wages and ever rising inflation and finally, the more neutral members who are finding it all a bit confusing.

Therefore, there is a strong possibility of a split vote this week – some members vote for no rise, some for 25bps and some for 50bps.

The Bank has already raised interest rates at four meetings in a row. This month, it could also be concerned about the weak pound, which has hit its lowest level against the US dollar since early in the pandemic.

Surging inflation means UK real wages shrank at the fastest rate in at least 20 years in April, squeezing households.

And there is more pain ahead, with a grocery industry research group warning that food price inflation in Britain is likely to peak at up to 15% this summer and will remain high until 2023.

Red-hot inflation is forcing central bankers to become more hawkish, with the US Federal Reserve hiking its key rate by 75 basis points last night.

It blamed higher energy prices following the Ukraine war, supply chain disruption from the pandemic, and ‘broader price pressures’, as last week’s unexpected surge in US inflation forced the Fed to move more aggressively.

It said:

The invasion of Ukraine by Russia is causing tremendous human and economic hardship.

The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.

Fed chair Jerome Powell signalled that a similar hefty rise was possible in July unless inflationary pressures soften, telling reporters:

“We at the Fed understand the hardship inflation is causing.

Inflation can’t go down until it flattens out. That’s what we’re looking to see.”

The Bank of England would love to see that too.

The agenda

  • 7am BST: European new car registrations
  • 8.30am BST: Swiss National Bank’s interest rate decision
  • 9.30am BST: Latest economic and business activity data from the Office for National Statistics
  • 12pm BST: Bank of England interest rate decision
  • 1.30pm BST: US weekly jobless figures
  • 1.30pm BST: US building permits and housing starts
  • 5pm BST: Russia’s Q1 GDP report

UK companies have cut back on job adverts in recent weeks, in a sign that the labour market may be cooling.

The Office for National Statistics reports that the total volume of online job adverts fell by 9% in the three weeks to 10 June, according to data from recruitment website Adzuna.

Adverts dropped across the UK, with the largest fall (-14%) in East Midlands.

Most sectors of the economy also saw a drop in adverts, with the largest decrease was in “manufacturing” (22%), followed by “facilities and maintenance” (17%). The largest increase compared with three weeks ago was in “wholesale and retail” at 6%.

There were still 29% more job adverts than in February 2020, before the pandemic, down from 41% more in late May.

The ONS also found that 15% of firms said they were experiencing a shortage of workers in early June, up from 13% reported in early May.

15% of businesses reported a shortage of workers in early June 2022 – up from 13% in early May 2022.

The accommodation and food service activities industry continued to report the highest percentage experiencing worker shortages (35%) https://t.co/pFYa7NfRGO pic.twitter.com/yfHYJdncxq

— Office for National Statistics (ONS) (@ONS) June 16, 2022

Rising costs are the top worry, with 26% of firms saying input price inflation was their main concern.

26% of businesses reported input price inflation (e.g. inflation of goods and services prices) as the main concern they had for July 2022.

Overall, the percentage for this concern continues to show a steady increase, up from 21% for late February 2022 https://t.co/pFYa7NfRGO pic.twitter.com/9UKk8EENdS

— Office for National Statistics (ONS) (@ONS) June 16, 2022

Eurozone government bonds are coming under pressure again. with Italian, Spanish, Greek and Portuguese government bond yields all jumping.

This pushed Italy’s 10-year bond yields back to nearly 4% (they hit an eight-year high fo 4.19% earlier this week), up 15 basis points today.

But even safe-haven German debt is under pressure. The yield (or interest rate) on 10-year bunds has jumped 18bp, to an eight-year high.

Yesterday, the ECB pledged to support Southern European governments, by reinvesting cash from maturing bonds held on its pandemic support package to combat widening bond spreads.

The ECB also said it would work on a new instrument to prevent an excessive divergence in borrowing costs.

*ITALIAN BONDS EXTEND DROP; 10-YEAR YIELD JUMPS 11BPS TO 3.92%

— Alfonso Ricciardi (@ricciardi_maria) June 16, 2022

#ECB fails with its bureaucratic compromise of #PEPP-Reinvestments. That’s too little. There must and will be much more to come (#QE) because italian yields rise above 4 percent again. In Germany we say: “In danger and distress, the middle way brings death”. pic.twitter.com/5OfwJ3s3VJ

— Hannes Zipfel (@HannesZipfel) June 16, 2022

After the excitement of yesterday’s ECB emergency meeting and 75bp hike by the US Fed, the SNB kept its end up by unexpectedly raising its policy rate by 50bps this morning – its first rate rise since 2007. https://t.co/UF7qILmiQV pic.twitter.com/o0wmY5bMnO

— Capital Economics Europe (@CapEconEurope) June 16, 2022

European markets fall further

European markets have dropped deeper into the red, after Switzerland’s central bank surprised investors by raising interest rates this morning.

The FTSE 100 index of blue-chip shares has now slumped by over 2%, down 154 points at 7131, a one-month low.

France’s CAC has also lost over 2%, and is on track to close in bear market territory – more than 20% off its peak in January.

Germany’s DAX has tumbled 2.7%, as fears of rising interest rates sweep markets again.

Marios Hadjikyriacos, senior investment analyst at XM, says:

The Swiss National Bank took markets by storm today after it raised interest rates by 50bps, overcoming even the most aggressive forecasts.

Central banks: from whatever it takes to whatever it breaks.

— Frederik Ducrozet (@fwred) June 16, 2022

how is it possible that SNB have wrecked the joint?

— BisphamGreen (@BisphamGreen) June 16, 2022

Wall Street is set for losses, as yesterday’s rally evaporates.

U.S. S&P 500 E-MINI SEPTEMBER FUTURES DOWN 2.25%; NASDAQ FUTURES DOWN 2.73%

— *Walter Bloomberg (@DeItaone) June 16, 2022

Here’s more reaction to the rise in Swiss interest rates from -0.75% to -0.25%, from Simon Harvey, head of FX analysis at Monex Europe,:

While the consensus was for the Swiss National Bank to use today’s meeting to signal a policy change in September, last week’s hawkish ECB meeting coupled with a more hawkish Federal Reserve last night likely forced the SNB into earlier action.

With much of Switzerland’s current inflation coming through the trade channel, the Swiss National Bank is unofficially targeting a stronger inflation-adjusted CHF rate (real exchange rate) in order to reduce the level of imported inflation.

Widening monetary policy differentials threatens this objective, hence warranting an earlier than expected rate hike.

Here’s Frederik Ducrozet of Pictet Wealth Management:

🇨🇭Welcome to a brave new world where even the SNB surprises with a 50bp hike, and Jordan says they can sell the CHF if it weakens. pic.twitter.com/TIimBRuLpu

— Frederik Ducrozet (@fwred) June 16, 2022

Swiss central bank unexpectedly raises interest rates

Swiss National Bank (SNB) logo is pictured on its building in BernThe Swiss National Bank (SNB) logo is pictured on its building in Bern, Switzerland June 16, 2022. REUTERS/Arnd Wiegmann
The Swiss National Bank building in Bern, Switzerland. Photograph: Arnd Wiegmann/Reuters

Drama in Zurich, where Switzerland’s central bank has surprisingly raised interest rates from record lows.

The Swiss National Bank raised its policy interest rate for the first time in 15 years, up from -0.75% to -0.25%.

This 50-basis-point rise makes the SNB the latest central bank to lift interest rates to fight inflation.

This is the first interest rate rise by the SNB since Septenber 2007; it had kept borrowing costs at -0.75% since 2015.

Thomas Jordan, chair of the SNB’s governing council, said the bank decided to tighten monetary policy to counter increased inflationary pressure.

Swiss National Bank’s semi-annual conference today, with vice-chairman Fritz Zurbruegg, chairman Thomas Jordan, and board member Andrea Maechler
Swiss National Bank’s semi-annual conference today, with vice-chairman Fritz Zurbruegg, chairman Thomas Jordan, and board member Andrea Maechler Photograph: Anthony Anex/EPA

Jordan also indicated that further interest rate rises could follow, saying:

The tighter monetary policy is aimed at preventing inflation from spreading more broadly to goods and services in Switzerland.

It cannot be ruled out that further increases in the SNB policy rate will be necessary in the foreseeable future to stabilise inflation in the range consistent with price stability over the medium term.

To ensure appropriate monetary conditions, we are also willing to be active in the foreign exchange market as necessary.

The Swiss franc has soared in response, up over 1.8% against the euro. The SNB has previously tried to prevent the franc rising too much, as investors seek a safe-haven asset.

Swiss franc soars as SNB beats the ECB to the punch in hiking rates
EUR/CHF falls by 2% from 1.0370 to 1.0170 as the SNB surprises pic.twitter.com/ebzUCFhFW8

— Dr.Anirudh Sethi ,PhD (@Iamanirudhsethi) June 16, 2022

SNB mini threat. 1/2 The unexpected 50 bps hike by the Swiss National Bank is a clear reminder that any ‘dovish sounding’ communication of central banks, like yesterday’s #FederalReserve‘s Dot Plot, comes against a backdrop of aggressive global monetary tightening. pic.twitter.com/bF1KUsTVC1

— jeroen blokland (@jsblokland) June 16, 2022

2/2 Unless the #ECB surprises with an emergency rate hike, which is not likely since it just had an emergency meeting about a new bond-buying program to halt peripheral bond spreads, the SNB hike means further divergence between the #euro and the rest of the world. #EURCHF ↓ 2%. pic.twitter.com/dhZ4yaLufB

— jeroen blokland (@jsblokland) June 16, 2022

well that was an eventful morning…nasty profit warning at Asos, veiled one at Boohoo, Halfords shares getting pasted and THG still sending bidders packing

— Jonathan Eley (@JonathanEley) June 16, 2022

In a busy morning for retail news, online retail and software group THG (formerly The Hut Group) says it has rebuffed all its recent takeover approaches.

There was a flurry of drama last month when TGH attracted some interest from property mogul Nick Candy, and also rejected an approach at 170p per share from Belerion Capital and King Street Capital Management, worth £2.1bn.

THG said it had received indicative proposals from numerous parties in recent months, but they had all “significantly undervalued” the e-commerce group — and it hadn’t provided due diligence access to any of these parties.

The City has reacted by sending THG’s shares tumbling 15% to 89p, the lowest since April.

The boss of Halfords has accused the Government of taking a “backwards step” by stopping last remaining subsidies for electric cars.

Graham Stapleton, Halfords CEO, said the closure of the £300m plug-in car grant scheme for new orders earlier this week would hurt mass take-up of electric cars.

“Until now, we have been greatly encouraged by the Government’s commitment to making the transition to electric cars.

“However, the sudden and complete removal of the plug-in subsidy is a backward step.

“It will delay mass adoption at a time when we need to be doing everything we can to help people to choose greener transport options.

“We are writing to the Secretary of State for Transport to ask him to reconsider.”

Halfords also reported a near 50% increase in pre-tax profits to £96.6m, helped by growth in its motoring and autocentres businesses.

But it warned it faces some macroeconomic headwinds, with Stapleton saying:

While rising inflation and declining consumer confidence will naturally present short-term challenges for any customer-facing business like ours, we remain confident in Halfords’ long-term growth prospects due to our service-led strategy and the enduring strength of our brand, people, products and services.”

Halfords’ shares are being hit, down 20%.

Online fashion retailer Boohoo has also reported an increase in customers returning items, like its rival ASOS this morning.

Boohoo reported an 8% drop in revenues for the last quarter, due to tough comparisons compared to a year ago (when the pandemic was boosting online shopping), as well as higher product returns

It said UK sales fell 1%, but returned to growth in May. Sales in the US tumbled 26%.

European markets retreat

European stock markets have dropped into the red this morning, as recession worries hit shares again.

The UK’s FTSE 100 has tumbled by 105 points, or almost 1.5%, to 7166, wiping our yesterday’s gains. The blue-chip index has now lost almost 6% so far this month.

Retailers are among the fallers, following ASOS’s profits warning, such as JD Sports (-6.5%), Next (-5.3%) and Kingfisher (-4.1%).

There are similar losses across Europe too.

European stock markets, June 16 2022
European stock markets this morning Photograph: Refinitiv

Chris Beauchamp, chief market analyst at IG Group, says growth worries are pushing markets down.

It hasn’t taken long for the post-Fed bounce in stocks to fade, and given the gloomier outlook for growth that is hardly surprising. Stocks might have weathered the biggest single rise in almost 30 years quite well, but we are still living in the same world we were 24 hours ago, one where growth is slowing, earnings are still falling and prices keep on rising.

This is not a great environment for stocks, and it looks like we have a way to go before global equities look to be really good value.

Robin Brooks, chief economist at the Institute of International Finance, says a global recession is coming, as central bankers raise interest rates.

Global recession is coming. The latest Fed forecasts project a huge drop in core inflation (lhs, green), but only a very small rise in the unemployment rate (rhs, green). Hard to see how inflation comes down so much without a much bigger jump in unemployment and recession… pic.twitter.com/wguDTJN7Or

— Robin Brooks (@RobinBrooksIIF) June 15, 2022

The pound has dropped in early trading, back towards its lows earlier this week.

Sterling has lost one cent against the dollar to $1.2070, losing much of Wednesday’s rally.

Against the euro, the pound is down half a eurocent at €1.16.

This weakness may suggest traders don’t expect the Bank of England to announce a half-point interest rate rise at noon, and to stick to a typical quarter-point rise.

Jeffrey Halley, analyst at OANDA, explains:

Soaring energy prices, robust labour demand, cost of living increases, and a central bank that raised the white flag on imported inflation some time ago, have torpedoed the British Pound.

The BOE has quietly gone about its business with a series of 0.25% hikes these past months and I don’t expect that to change today.

ASOS issues profit warning as returns rates surge

A keyboard and a shopping cart are seen in front of a displayed ASOS logo.
Photograph: Dado Ruvić/Reuters

Online fashion retailer ASOS has issued a profits warning after being hit by an increase in customers returning items, which it blames on ‘inflationary pressures’.

Net sales over the last three months were affected by a “significant increase in returns rates” in the UK and Europe towards the end of the period, ASOS reports this morning.

As well as hitting sales, those returns also push up ASOS’s delivery costs and lead to more discounting to clear stock, undermining the benefits from a rise in gross lending.

The company now expects pre-tax profits of £20m to £60m this year, down from analyst forecasts of around £82m (according to Refinitiv), due to “uncertain consumer purchasing behaviour”.

Back in January, before the Ukraine war, ASOS was forecasting earnings of £110m-£140m, but rising cost pressures are now hitting its customers. In April, it said suspending operations in Russia would lower adjusted pre-tax profits by £14m.

Mat Dunn, ASOS’s chief operating officer, says global supply chain challenges are creating inflationary pressures.

What is now clear, based on the significant increase in returns rates that we have seen, is that this inflationary pressure is increasingly impacting our customers shopping behaviour.

Shares in ASOS have tumbled 14% in early trading.

The UK group has also promoted José Antonio Ramos Calamonte, currently chief commercial officer, to become chief executive, succeeding Nick Beighton who stepped down last autumn after an earlier profits warning.

FCA tells lenders to support consumers struggling with the cost of living

The UK’s financial watchdog has warned UK lenders to provide more support for customers who are struggling with soaring living costs.

The Financial Conduct Authority has written to banks and lenders, urging them to act now to offer help to borrowers who are struggling with payments and customers in vulnerable circumstances.

The FCA is concerned that some customers in vulnerable circumstances are not getting the support they need.

Last month, British Gas said it was taking on more staff to handle a rise in customers struggling to cope with soaring energy bills, while water regulator Oftwat has warned some people need support with utility bills.

The FCA is asking lenders to:

  • make sure that their approach to taking on new borrowers takes account of the financial pressure they may face and the impact on their expenditure.
  • consider and, if necessary, improve how they treat consumers in vulnerable circumstances.
  • effectively direct customers who need it to money guidance or free debt advice.

Full story: UK food price rises could hit 15% over summer

Sarah Butler

Sarah Butler

Food price rises in the UK could hit 15% this summer – the highest level in more than 20 years – with inflation lasting into the middle of next year, according to a report.

Meat, cereals, dairy, fruit and vegetables are likely to be the worst affected as the war in Ukraine combines with production lockdowns in China and export bans on key food stuffs such as palm oil from Indonesia and wheat from India, the grocery trade body IGD warns.

Products that rely on wheat, such as chicken, pork and bakery items, are likely to face the most rapid price rises as problems with exports and production from Ukraine, a big producer of grain, combine with sanctions on Russia, another key producer.

The report suggests inflation will last at least until next summer but could persist beyond that as a result of a range of factors such as additional key agricultural countries introducing export bans, trade disruption connected to Brexit, unfavourable weather in the northern hemisphere or further weakening of sterling.

The report says Britain’s food and consumer goods industry is “uniquely exposed to current pressures due to a reliance on food imports and the impacts of EU exit”.

It says the new regime has added to costs through additional administration at the EU border and other legislation changes – as well as labour shortages prompting higher wages for farmers and food producers.

James Walton, the chief economist at IGD, said:

“From our research, we are unlikely to see the cost of living pressures easing soon.

This will undoubtedly leave many households – and the businesses serving them – looking to the future with considerable anxiety. If average food bills go up 10.9% in a year, a family of four would need to find approximately £516 extra a year. We are already seeing households skipping meals – a clear indictor of food stress.

With growth slowing, this is the wrong moment to raise interest rates, argues Miatta Fahnbulleh, chief economist at the New Economics Foundation.

She explains that higher borrowing costs would “choke our struggling economy”, and increase the risk of recession.

The UK’s economic growth has just been forecast to be the slowest in the developed world.

At the same time, regular pay excluding bonuses is down by 2.2% – the fastest fall in a decade.

1/4

— Miatta Fahnbulleh (@Miatsf) June 16, 2022

In this context, an #InterestRate rise from the @bankofengland today would only serve to choke our struggling economy, and add more pressure to households on the brink.

2/4

— Miatta Fahnbulleh (@Miatsf) June 16, 2022

Why? #InterestRates can be increased to dampen inflation when inflation is caused by the economy overheating. But the #inflation we’re seeing now is caused by global disruption and supply issues. Rising interest rates won’t solve those issue.

3/4

— Miatta Fahnbulleh (@Miatsf) June 16, 2022

But what rising interest rates will do is make borrowing more expensive, dampen investment & increase the risk of recession when people are already struggling with rising prices. Stagflation is the worse possible outcome.

Let’s hope the @bankofengland makes the right call.

4/4

— Miatta Fahnbulleh (@Miatsf) June 16, 2022

The priority for the Bank of England’s communications over the next 24 hours is to express confidence in the economy and the path of monetary policy, argues Simon French, chief economist at Panmure Gordon.

That would provide reassurance to companies and households, and help ward off a recession:

Some thoughts on todays interest rate decision from the BoE. First up the policy decision. As with the Fed overnight it looks set to be a split decision. There is a caucus of the MPC who have publicly stated the merits of going faster, sooner, to avoid a higher terminal rate 🧵

— Simon French (@shjfrench) June 16, 2022

Recent events (fiscal boost, higher inflation, weakness in GBPUSD broadening to other pairs) have possibly given this group on MPC a majority & path to 50bp today. The actions of other major central banks going in >25bp increments will also weight on thinking given herd tendency

— Simon French (@shjfrench) June 16, 2022

Three thoughts if this is the outcome. Firstly, the transmission to household disposable income has weakened since last UK rate hiking cycle with lower mortgaged home ownership, and >80% of mortgages now on fixed rate. This might not be the worst thing given concerns over growth

— Simon French (@shjfrench) June 16, 2022

Secondly, plenty of speculation of a “Sterling Crisis” with traders potentially targeting GBP having gone for the Yen. Evidence (below) is thin so far with GBPUSD moving in line with divergent short rates. The Fed’s greater recent hawkishness the biggest driver of 1.20 FX rate pic.twitter.com/QFxFYMvmzn

— Simon French (@shjfrench) June 16, 2022

Thirdly, there are no easy decisions for MPC with CPI at 9% & growth flatlining in recent months. Similarly the inflation outcome (in my view) would have been only marginally different with different policy path in H2 21. A level-headed response is needed whatever the policy call

— Simon French (@shjfrench) June 16, 2022

Most important thing for the BoE’s comms over next 24h is expressing confidence in the economy & policy path. If U.K. to avoid recession needs hhlds/corporates to smooth consumption/investment through this period – not pursue precautionary saving. Narratives matter END/

— Simon French (@shjfrench) June 16, 2022

Introduction: Bank of England interest rate decision looms

Governor of the Bank of England Andrew Bailey last month.
Governor of the Bank of England Andrew Bailey last month. Photograph: Reuters

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Over to you, governor. After America’s central bank announced its largest interest rate rise since 1994, the Bank of England must now decide whether, and how fast, to lift UK borrowing costs.

Governor Andrew Bailey and colleagues on the Bank’s Monetary Policy Committee faced a difficult decision at this week’s meeting, with the economy slowing sharply and inflation heading towards double-digit levels.

The MPC are very likely to lift Bank Rate, currently 1%, at noon today – and some economists believe we could get the first 50 basis point increase since 1995, which would take rates to 1.5%.

BoE later…imo should do 50, but will probs do 25 judging by recent MPC comments/last vote…inflation & growth outlooks both worsening…cautious tone won’t help £ which will import more inflation…dug themselves into a v deep hole now & tough to see how they get out…

— Michael Brown (@MrMBrown) June 16, 2022

Conall MacCoille, chief economist at wealth managers Davy, believes there are compelling reasons for the BoE to raise interest rates by as much as 50bps.

“CPI inflation at 9% and a tight labour market are creating a risk that employee price expectations could become entrenched.”

Furthermore, MacCoille points out that some Bank policymakers wanted a larger rise last month.

“The MPC’s vote was split 6-3 in May, with the minority favouring a 50bps rise in interest rates”.

James Lynch, fixed income manager at Aegon Asset Management, reckons the committee could split into three camps, making a smaller 25bp rise more likely.

The dovish view can be emboldened by the slowdown in GDP growth, the hawkish camp encouraged by the labour market strength/higher wages and ever rising inflation and finally, the more neutral members who are finding it all a bit confusing.

Therefore, there is a strong possibility of a split vote this week – some members vote for no rise, some for 25bps and some for 50bps.

The Bank has already raised interest rates at four meetings in a row. This month, it could also be concerned about the weak pound, which has hit its lowest level against the US dollar since early in the pandemic.

Surging inflation means UK real wages shrank at the fastest rate in at least 20 years in April, squeezing households.

And there is more pain ahead, with a grocery industry research group warning that food price inflation in Britain is likely to peak at up to 15% this summer and will remain high until 2023.

Red-hot inflation is forcing central bankers to become more hawkish, with the US Federal Reserve hiking its key rate by 75 basis points last night.

It blamed higher energy prices following the Ukraine war, supply chain disruption from the pandemic, and ‘broader price pressures’, as last week’s unexpected surge in US inflation forced the Fed to move more aggressively.

It said:

The invasion of Ukraine by Russia is causing tremendous human and economic hardship.

The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.

Fed chair Jerome Powell signalled that a similar hefty rise was possible in July unless inflationary pressures soften, telling reporters:

“We at the Fed understand the hardship inflation is causing.

Inflation can’t go down until it flattens out. That’s what we’re looking to see.”

The Bank of England would love to see that too.

The agenda

  • 7am BST: European new car registrations
  • 8.30am BST: Swiss National Bank’s interest rate decision
  • 9.30am BST: Latest economic and business activity data from the Office for National Statistics
  • 12pm BST: Bank of England interest rate decision
  • 1.30pm BST: US weekly jobless figures
  • 1.30pm BST: US building permits and housing starts
  • 5pm BST: Russia’s Q1 GDP report



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