Move toward interest rate rise expected

first_img KCS-content whatsapp Show Comments ▼ Sunday 20 February 2011 11:03 pm Move toward interest rate rise expected center_img Share THE Bank of England is moving closer to a hike in interest rates, it is expected to reveal this week.The latest voting record of the Bank’s monetary policy committee (MPC) could expose more members voting for the 0.25 per cent rise when it is revealed on Wednesday, according to some analysts.Two MPC members voted for a rise last month, with Martin Weale joining Andrew Sentance’s ongoing call for a modest step towards bank rate normalisation.“We are suggesting that the vote was 6-3 this time, perhaps with David Miles also favouring an increase,” said Investec’s Philip Shaw.“And it is not impossible that the outcome was 5-4,” he added.David Miles is the most likely member of the MPC to join the side supporting a tightening of policy, agreed Alan Clarke of BNP Paribas, while many observers are pointing to the increasingly hawkish comments of the Bank’s deputy governor Charles Bean.A rate rise could also be sharper than expected, according to Douglas McWilliams of the Centre for Economic and Business Research. “I think there will be a temptation for the MPC to show it’s serious, by moving 0.5 per cent upwards rather than 0.25 per cent,” McWilliams said.With sluggish growth and spiralling prices, the UK is at risk of “stagflation,” McWilliams added. Instead of being driven by domestic labour costs, Britain now faces inflation from primary product prices, “which are immensely volatile and driven by international conditions,” McWilliams said. In a hard hitting speech last week, the MPC’s chief hawk Andrew Sentance warned: “The UK is a very international economy and global influences are a major issue for the course of demand and inflation in the British economy.”“The value of the pound on the foreign exchanges therefore needs to be one of the key areas of focus for the MPC,” Sentance said.Nudging up rates might bring about a “modest appreciation of sterling,” he said, protecting Britain from price pressures from abroad. whatsapp Tags: NULLlast_img read more

FTSE falls on worry political unrest will increase oil price

first_img More From Our Partners Supermodel Anne Vyalitsyna claims income drop, pushes for child supportnypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comMatt Gaetz swindled by ‘malicious actors’ in $155K boat sale boondogglenypost.comNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgKiller drone ‘hunted down a human target’ without being told tonypost.comConnecticut man dies after crashing Harley into live bearnypost.comUK teen died on school trip after teachers allegedly refused her pleasnypost.comMark Eaton, former NBA All-Star, dead at 64nypost.comInside Ashton Kutcher and Mila Kunis’ not-so-average farmhouse estatenypost.comBiden received funds from top Russia lobbyist before Nord Stream 2‘Neighbor from hell’ faces new charges after scaring off home buyersnypost.comI blew off Adam Sandler 22 years ago — and it’s my biggest regretnypost.com980-foot skyscraper sways in China, prompting panic and whatsapp Tags: NULL whatsapp KCS-content BRITAIN’S leading share index fell one per cent yesterday on concerns that political unrest could spread to top oil exporter Saudi Arabia, pushing crude prices higher and sending oil-sensitive travel firms lower.Brent crude rose 1.8 per cent to above $113 a barrel on a report, promptly denied, of Saudi involvement to try and quell protests in Bahrain. Nevertheless, the report in an Egyptian newspaper rattled investors.Travel-related stocks bore the brunt. Cruise operator Carnival shed 6 per cent in heavy trade, InterContinental Hotels lost 4 per cent, and International Airlines Group slipped 0.8 per cent after trading as much as 3 per cent higher earlier.“Libya is a sideshow; it’s not as big a show as a week ago. Saudi Arabia is a big concern,” said Jawaid Afsar, trader at Securequity. “The slightest of rumours will make this market roll over very quickly.”Revolt in Libya has cut as much as half of the OPEC member’s output, though Saudi Arabia has stepped in and plugged the supply gap. The worst-case scenario for oil markets would be an interruption to supply from Saudi Arabia, which holds most of the world’s spare crude output capacity.The wider fear is that sustained higher oil prices could dampen global growth.The FTSE 100 closed down 58.25 points at 5,935.76 after trading as high as 6,040.43 earlier. Volumes on the benchmark were about 109 percent of its 90-day daily average.Meanwhile the FTSEurofirst 300 index of top European shares ended 0.6 per cent lower at 1,161.92 points, resuming last week’s pull-back that was triggered by escalating violence in OPEC member Libya.Index heavyweight HSBC shed 3 per cent in strong volume after brokers Deutsche Bank and UBS downgraded their ratings. Yesterday’s fall extended the previous session’s 4.7 per cent drop after HSBC cut profitability targets and its annual profits fell short of expectations.“The results are not that bad to warrant such a big drop in the share price … The shares are coming back to reasonable valuation levels,” a dealer said, adding that he was looking to buy at a price range of 650 to 665 pence.HSBC shares are approaching oversold territory, with the 14-day relative strength index (RSI) reaching 36.1. Thirty and below is considered oversold.Outsourcing group Capita, however, rose 5.2 per cent after saying it was in talks with Zurich Financial Services about an extension of the term of Capita’s existing contract.Associated British Foods rebounded 2.7 per cent in heavy volume after Evolution Securities upgraded the owner of discount fashion retailer Primark to “buy” from “neutral”.The stock lost 5.9 per cent on Monday after it reported a slowdown in growth at Primark, a major driver of its performance.FTSE 100 companies are expected to post a 21 per cent increase in earnings in 2011 after an estimated 55.2 per cent rise last year, according to Thomson Reuters.That compares with an estimate of 15.7 per cent earnings growth for STOXX Europe 600 companies this year and 14.5 per cent for US S&P 500 companies. But the UK index, with a one-year forward price-to-earnings (P/E) of 10.5 times, is cheaper than the other two indexes, Thomson Reuters Datastream showed. Tuesday 1 March 2011 7:16 pm Show Comments ▼ FTSE falls on worry political unrest will increase oil price Sharelast_img read more