Stubborn inflation has dashed investor hopes that the Bank of England would soon contemplate the introduction of interest rate cuts. “Improving interest rate expectations in recent weeks has led to some forecasters predicting the first cut in the first half of 2024, with lenders slashing mortgage rates as they battle it out to retain their existing clients and attract new business,” Alice Haine, personal finance analyst at Bestinvest explained.

Haine added that this unexpected rapid rise in inflation has come as a blow to mortgage holders and prospective buyers, who had hoped for interest rate cuts to be introduced as a means of driving down mortgage rates.

The post UK Inflation Rises to 4%, Dashing Hopes of an Interest Rate Cut appeared first on theprimarymarket.com.

Among the most anticipated decisions is that of the US Federal Reserve, due on Wednesday. The Fed is widely expected to keep its interest rate constant, at the highest rate in two decades, with rate cuts expected to come into play next year. “There’s no incentive for the Fed to sound too eager to cut rates, lest financial conditions loosen further,” Bloomberg Economics observed.

The European Central Bank is set to deliver its interest rate decision on Thursday, with executive board member Isabel Schnabel claiming that further rate hikes are unlikely. A rate cut is expected to be delivered in April 2024. The Bank of England, which is also set to announce its interest rate decision on Thursday, is expected to hold rates constant for a third straight month.

The post Global Central Bankers Convene to Discuss Final Interest Rate Decisions of 2023 appeared first on theprimarymarket.com.

News of the currency’s stumble comes ahead of the Bank of England’s policy meeting next week. Markets are expecting the central bank to hold rates constant. According to future markets, the BoE’s first rate cut is expected in June, while the European Central Bank and Federal Reserve are expected to implement rate cuts as soon as March.

“Whilst a lot of the weak structural backdrop is known, the key negative for sterling over 2024 is the potential for the markets to price in earlier rate cuts,” Gareth Gettinby, an investment manager with Aegon Asset Management, remarked, suggesting that the sterling’s strength will be largely affected by interest rates.

The post Sterling Tanks Ahead of Bank of England Policy Meeting appeared first on theprimarymarket.com.

In New York, the S&P 500 advanced a further 0.3% after rallying 1.91% on Tuesday; its biggest daily rise since April. Futures on the Nasdaq 100 gained 0.3% while those on the Dow Jones Industrial Average rose 0.2%. In Europe, the Stoxx 600 index gained 0.6%, led by consumer product and mining stocks.

US prices were shown to drop by more than expected on Tuesday, while on Wednesday morning, UK inflation cooled by more than analysts projected. UK consumer prices rose 4.6% in October compared to last year, down from September’s 6.7% annual rise.

The post Stocks Rally as Markets Expect Central Banks to End Rate Hikes appeared first on theprimarymarket.com.

While inflation has continued to fall, BoE Governor Andrew Bailey explained that a further drop needs to be achieved in order to bring inflation down to the central bank’s 2% target. “We’ve held rates unchanged this month, but we’ll be watching closely to see if further rate increases are needed. It’s much too early to be thinking about rate cuts,” Bailey revealed.

Since reaching double-digit figures, UK inflation has gradually eased to 6.7% in the year September, unchanged from the previous month. Still, this rate is higher than the rest of the G7 economies, pushing the UK to ramp up its fight against stubborn inflation.

The post Bank of England Holds Rates at 15-Year High appeared first on theprimarymarket.com.

While the BoE’s Monetary Policy Committee is yet to lower its gross domestic product estimate for late 2023 and early 2024, official data has indicated a rise in the probability of an impending recession.

“GDP growth has been weaker, the unemployment rate is higher and pay growth is finally easing across all gauges,” Bloomberg Economics observed. “Financial markets have responded to the recent flow of news by pricing in a smaller-than-50% chance that interest rates reach 5.5%, having seen a peak expectation of over 6% in the summer.”

The post Bank of England Expected to Forecast Recession Risk Ahead of General Election appeared first on theprimarymarket.com.

Goldman Sachs, Deutsche Bank, and Nomura all believe that the Bank of England will hold rates steady, backtracking from previous expectations of a September hike. Chris Turner, head of markets at ING, disagreed, claiming that a hike of 25 basis points is still likely, claiming that “a hike would provide GBP/USD with some much-needed support.” 

The sterling fell by 0.28% against the US dollar to $1.2309. Meanwhile, the euro strengthened against the British pound by 0.23%, reaching 86.55 pence.

The post Sterling Staggers Ahead of Bank of England Policy Decision appeared first on theprimarymarket.com.

Joblessness across Britain is on the rise while the housing market continues to dwindle. Still, the BoE remains determined to keep raising rates in an effort to suppress inflation. In addition to edging close to its highest level in 30 years, core inflation is more than three times higher than the central bank’s 2% target.

British inflation has managed to fall significantly over the last year, declining from 11% in October to just under 7% in July. The country is also beating back expectations that it will experience a recession in 2023, also reducing bets that a recession may start at the end of the year. Still, the UK remains the only Group of Seven (G7) economy that hasn’t bounced back to its pre-pandemic size.

The post UK Economy Slows Amid Bank of England Rate Hike appeared first on theprimarymarket.com.

In addition to outpacing the 7.5% growth during the previous quarter, the Office for National Statistics announced that this is the highest level that wages have increased since 2001. Wage growth outpaced experts’ estimates of a 7.4% rise.

Governor Andrew Bailey as well as other BoE policymakers maintain that this rising wage growth could push the central bank to implement a rate hike in September as prices continue to be pushed higher. “It very much leaves the BOE facing the conclusion that it may yet be forced to engineer a recession in order to finally get the inflation genie back in the bottle,” Stuart Cole, the chief macro economist at Equiti Capital in London observed.

The post Record UK Wage Growth Raises Bets on Bank of England Rate Hike appeared first on theprimarymarket.com.

Against the U.S. dollar, the pound fell 0.2% to $1.2688; just shy of its one-month low of $1.2680. The FTSE 100 index slumped by 1.46% to a two-week low as well as a third consecutive day of losses.

Markets are largely betting on the Bank of England raising interest rates from 5% to a 15-year high of 5.25%. Still, markets are attributing a 40% probability to the central bank raising interest rates by a half-point as it did in June.

Another concern among investors is Fitch’s recent decision to downgrade the U.S. economy, thereby causing global share markets to decline.

Given that markets expect a 50 basis point interest rate hike, Lee Hardman, senior currency strategist at MUFG, observed that a 25 basis point hike would likely weaken the pound further.

The post Pounds Heads for One-Month Low Ahead of BoE Decision appeared first on theprimarymarket.com.

Stubborn inflation has dashed investor hopes that the Bank of England would soon contemplate the introduction of interest rate cuts. “Improving interest rate expectations in recent weeks has led to some forecasters predicting the first cut in the first half of 2024, with lenders slashing mortgage rates as they battle it out to retain their existing clients and attract new business,” Alice Haine, personal finance analyst at Bestinvest explained.

Haine added that this unexpected rapid rise in inflation has come as a blow to mortgage holders and prospective buyers, who had hoped for interest rate cuts to be introduced as a means of driving down mortgage rates.

The post UK Inflation Rises to 4%, Dashing Hopes of an Interest Rate Cut appeared first on theprimarymarket.com.

Among the most anticipated decisions is that of the US Federal Reserve, due on Wednesday. The Fed is widely expected to keep its interest rate constant, at the highest rate in two decades, with rate cuts expected to come into play next year. “There’s no incentive for the Fed to sound too eager to cut rates, lest financial conditions loosen further,” Bloomberg Economics observed.

The European Central Bank is set to deliver its interest rate decision on Thursday, with executive board member Isabel Schnabel claiming that further rate hikes are unlikely. A rate cut is expected to be delivered in April 2024. The Bank of England, which is also set to announce its interest rate decision on Thursday, is expected to hold rates constant for a third straight month.

The post Global Central Bankers Convene to Discuss Final Interest Rate Decisions of 2023 appeared first on theprimarymarket.com.

News of the currency’s stumble comes ahead of the Bank of England’s policy meeting next week. Markets are expecting the central bank to hold rates constant. According to future markets, the BoE’s first rate cut is expected in June, while the European Central Bank and Federal Reserve are expected to implement rate cuts as soon as March.

“Whilst a lot of the weak structural backdrop is known, the key negative for sterling over 2024 is the potential for the markets to price in earlier rate cuts,” Gareth Gettinby, an investment manager with Aegon Asset Management, remarked, suggesting that the sterling’s strength will be largely affected by interest rates.

The post Sterling Tanks Ahead of Bank of England Policy Meeting appeared first on theprimarymarket.com.

In New York, the S&P 500 advanced a further 0.3% after rallying 1.91% on Tuesday; its biggest daily rise since April. Futures on the Nasdaq 100 gained 0.3% while those on the Dow Jones Industrial Average rose 0.2%. In Europe, the Stoxx 600 index gained 0.6%, led by consumer product and mining stocks.

US prices were shown to drop by more than expected on Tuesday, while on Wednesday morning, UK inflation cooled by more than analysts projected. UK consumer prices rose 4.6% in October compared to last year, down from September’s 6.7% annual rise.

The post Stocks Rally as Markets Expect Central Banks to End Rate Hikes appeared first on theprimarymarket.com.

While inflation has continued to fall, BoE Governor Andrew Bailey explained that a further drop needs to be achieved in order to bring inflation down to the central bank’s 2% target. “We’ve held rates unchanged this month, but we’ll be watching closely to see if further rate increases are needed. It’s much too early to be thinking about rate cuts,” Bailey revealed.

Since reaching double-digit figures, UK inflation has gradually eased to 6.7% in the year September, unchanged from the previous month. Still, this rate is higher than the rest of the G7 economies, pushing the UK to ramp up its fight against stubborn inflation.

The post Bank of England Holds Rates at 15-Year High appeared first on theprimarymarket.com.

While the BoE’s Monetary Policy Committee is yet to lower its gross domestic product estimate for late 2023 and early 2024, official data has indicated a rise in the probability of an impending recession.

“GDP growth has been weaker, the unemployment rate is higher and pay growth is finally easing across all gauges,” Bloomberg Economics observed. “Financial markets have responded to the recent flow of news by pricing in a smaller-than-50% chance that interest rates reach 5.5%, having seen a peak expectation of over 6% in the summer.”

The post Bank of England Expected to Forecast Recession Risk Ahead of General Election appeared first on theprimarymarket.com.

Goldman Sachs, Deutsche Bank, and Nomura all believe that the Bank of England will hold rates steady, backtracking from previous expectations of a September hike. Chris Turner, head of markets at ING, disagreed, claiming that a hike of 25 basis points is still likely, claiming that “a hike would provide GBP/USD with some much-needed support.” 

The sterling fell by 0.28% against the US dollar to $1.2309. Meanwhile, the euro strengthened against the British pound by 0.23%, reaching 86.55 pence.

The post Sterling Staggers Ahead of Bank of England Policy Decision appeared first on theprimarymarket.com.

Joblessness across Britain is on the rise while the housing market continues to dwindle. Still, the BoE remains determined to keep raising rates in an effort to suppress inflation. In addition to edging close to its highest level in 30 years, core inflation is more than three times higher than the central bank’s 2% target.

British inflation has managed to fall significantly over the last year, declining from 11% in October to just under 7% in July. The country is also beating back expectations that it will experience a recession in 2023, also reducing bets that a recession may start at the end of the year. Still, the UK remains the only Group of Seven (G7) economy that hasn’t bounced back to its pre-pandemic size.

The post UK Economy Slows Amid Bank of England Rate Hike appeared first on theprimarymarket.com.

In addition to outpacing the 7.5% growth during the previous quarter, the Office for National Statistics announced that this is the highest level that wages have increased since 2001. Wage growth outpaced experts’ estimates of a 7.4% rise.

Governor Andrew Bailey as well as other BoE policymakers maintain that this rising wage growth could push the central bank to implement a rate hike in September as prices continue to be pushed higher. “It very much leaves the BOE facing the conclusion that it may yet be forced to engineer a recession in order to finally get the inflation genie back in the bottle,” Stuart Cole, the chief macro economist at Equiti Capital in London observed.

The post Record UK Wage Growth Raises Bets on Bank of England Rate Hike appeared first on theprimarymarket.com.

Against the U.S. dollar, the pound fell 0.2% to $1.2688; just shy of its one-month low of $1.2680. The FTSE 100 index slumped by 1.46% to a two-week low as well as a third consecutive day of losses.

Markets are largely betting on the Bank of England raising interest rates from 5% to a 15-year high of 5.25%. Still, markets are attributing a 40% probability to the central bank raising interest rates by a half-point as it did in June.

Another concern among investors is Fitch’s recent decision to downgrade the U.S. economy, thereby causing global share markets to decline.

Given that markets expect a 50 basis point interest rate hike, Lee Hardman, senior currency strategist at MUFG, observed that a 25 basis point hike would likely weaken the pound further.

The post Pounds Heads for One-Month Low Ahead of BoE Decision appeared first on theprimarymarket.com.