Daniel Lacalle’s website here in English and here in Spanish.
Showing posts with label interest rates. Show all posts
Showing posts with label interest rates. Show all posts
Thursday, December 14, 2023
Tuesday, October 10, 2023
IMF Says UK Faces Five More Years of High Interest Rates
BBC: The UK faces another five years of high interest rates to stem rising prices, an influential global group has warned.
The International Monetary Fund expects the UK to have the highest inflation and slowest growth next year of any G7 economy including the US, France, Germany, Canada, Italy and Japan.
However, the Treasury said recent revisions to UK growth had not been factored in to the IMF's report.
The outlook was drawn up before this weekend's developments in Israel. » | Lucy Hooker & Faisal Islam, BBC News | Tuesday, October 10, 2023
The International Monetary Fund expects the UK to have the highest inflation and slowest growth next year of any G7 economy including the US, France, Germany, Canada, Italy and Japan.
However, the Treasury said recent revisions to UK growth had not been factored in to the IMF's report.
The outlook was drawn up before this weekend's developments in Israel. » | Lucy Hooker & Faisal Islam, BBC News | Tuesday, October 10, 2023
Wednesday, July 26, 2023
Fed Raises Rates after a Pause and Leaves Door Open to More
THE NEW YORK TIMES: Federal Reserve officials raised interest rates to their highest level in 22 years, continuing their 16-month-long campaign to wrestle inflation lower by cooling the American economy.
Officials pushed rates to a range of 5.25 to 5.5 percent, their highest level since 2001, while leaving the door open to further rate increases in the statement announcing their unanimous decision. Jerome H. Powell, the Fed chair, is speaking [in the accompanying video] to journalists to explain the move — and, potentially, to offer some hint at how the central bank is thinking about its next step. (+ video) » | Jeanna Smialek | Wednesday, July 26, 2023
Officials pushed rates to a range of 5.25 to 5.5 percent, their highest level since 2001, while leaving the door open to further rate increases in the statement announcing their unanimous decision. Jerome H. Powell, the Fed chair, is speaking [in the accompanying video] to journalists to explain the move — and, potentially, to offer some hint at how the central bank is thinking about its next step. (+ video) » | Jeanna Smialek | Wednesday, July 26, 2023
Thursday, June 22, 2023
Turkish Central Bank Raises Interest Rates to 15% after Two-year Freeze
THE GUARDIAN: Experts say increase from 8.5% may be insufficient to tackling surging inflation that some estimate at 110%
Turkey’s central bank has raised interest rates for the first time in more than two years, from 8.5% to 15%, but there is widespread concern that the move is insufficient to combat rising inflation and an ongoing economic crisis.
The decision marks a partial shift in the unorthodox economic policy of the president, Recep Tayyip Erdoğan, under which interest rates have been frozen since March 2021 despite a sharp devaluation in the Turkish lira.
The central bank’s monetary policy committee said it had raised rates “to begin the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behaviour.”
Inflation has risen to levels that are proving unbearable for large sections of the population, causing a widespread cost of living crisis. Officially, inflation in Turkey is at 39.59%, although unofficial estimates from Turkey’s independent Inflation Research Group put it at 110%. » | Ruth Michaelson | Thursday, June 22, 2023
Turkey’s central bank has raised interest rates for the first time in more than two years, from 8.5% to 15%, but there is widespread concern that the move is insufficient to combat rising inflation and an ongoing economic crisis.
The decision marks a partial shift in the unorthodox economic policy of the president, Recep Tayyip Erdoğan, under which interest rates have been frozen since March 2021 despite a sharp devaluation in the Turkish lira.
The central bank’s monetary policy committee said it had raised rates “to begin the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behaviour.”
Inflation has risen to levels that are proving unbearable for large sections of the population, causing a widespread cost of living crisis. Officially, inflation in Turkey is at 39.59%, although unofficial estimates from Turkey’s independent Inflation Research Group put it at 110%. » | Ruth Michaelson | Thursday, June 22, 2023
Bank of England Raises Interest Rates by a Half Point to 5%
THE GUARDIAN: Move brings borrowing costs to highest level since April 2008 as Bank intensifies efforts to control inflation
The Bank of England has raised interest rates by a half point to 5% as it intensifies its efforts to tackle stubbornly high inflation, adding to the strain on households struggling with soaring mortgage costs.
In what will be seen as a major move, the Bank’s monetary policy committee increased rates for the 13th consecutive time to the highest level since April 2008. Before the decision was announced, financial markets were evenly split on whether the Bank would vote for a half-point rise or a smaller quarter-point increase. » | Richard Partington, Economics correspondent | Thursday, June 22, 2023
Markets predict 6% UK interest rate by end of year: Rates will remain at level until summer 2024 after Bank of England hikes benchmark rate by half a percentage point »
The Bank of England has raised interest rates by a half point to 5% as it intensifies its efforts to tackle stubbornly high inflation, adding to the strain on households struggling with soaring mortgage costs.
In what will be seen as a major move, the Bank’s monetary policy committee increased rates for the 13th consecutive time to the highest level since April 2008. Before the decision was announced, financial markets were evenly split on whether the Bank would vote for a half-point rise or a smaller quarter-point increase. » | Richard Partington, Economics correspondent | Thursday, June 22, 2023
Markets predict 6% UK interest rate by end of year: Rates will remain at level until summer 2024 after Bank of England hikes benchmark rate by half a percentage point »
Friday, May 26, 2023
UK Prepares for Recession amid Rising Interest Rates
Hunt Will Back More Interest Rate Rises Even If It Pushes UK [in]to Recession
THE GUARDIAN: Chancellor to support Bank of England’s decisions because ‘inflation is a source of instability’
Jeremy Hunt said he will back further interest rate rises by the Bank of England, even if it risks plunging the UK into recession, in order to combat soaring inflation.
The chancellor’s comments come after figures this week showed annual inflation in April was higher than expected at 8.7%, raising the prospect of a 13th interest rate rise by the Bank of England. Markets are now predicting that interest rates could climb to 5.5% by the end of the year, up from their current level of 4.5%, putting further pressure on borrowers and the housing market. » | Kalyeena Makortoff | Friday, May 26, 2023
Jeremy Hunt said he will back further interest rate rises by the Bank of England, even if it risks plunging the UK into recession, in order to combat soaring inflation.
The chancellor’s comments come after figures this week showed annual inflation in April was higher than expected at 8.7%, raising the prospect of a 13th interest rate rise by the Bank of England. Markets are now predicting that interest rates could climb to 5.5% by the end of the year, up from their current level of 4.5%, putting further pressure on borrowers and the housing market. » | Kalyeena Makortoff | Friday, May 26, 2023
Thursday, May 11, 2023
Bank of England Raises UK Interest Rates to 4.5%
THE GUARDIAN: Latest 0.25 point hike marks 12th rise in a row as Bank battles stubbornly high inflation
The Bank of England has raised interest rates by a quarter of a percentage point to 4.5% amid growing concerns about persistently high inflation in the UK.
The Bank’s monetary policy committee voted by a majority for a 12th successive increase in borrowing costs, continuing its most aggressive rate-hiking cycle since the 1980s in an attempt to dampen UK inflation which remains in double digits.
UK rates are at the highest level since October 2008, when the global economy was in the grips of the financial crisis. » | Richard Partington | Thursday, May 11, 2023
The Bank of England has raised interest rates by a quarter of a percentage point to 4.5% amid growing concerns about persistently high inflation in the UK.
The Bank’s monetary policy committee voted by a majority for a 12th successive increase in borrowing costs, continuing its most aggressive rate-hiking cycle since the 1980s in an attempt to dampen UK inflation which remains in double digits.
UK rates are at the highest level since October 2008, when the global economy was in the grips of the financial crisis. » | Richard Partington | Thursday, May 11, 2023
Wednesday, December 14, 2022
Bank of England Poised to Raise Borrowing Costs to Combat Inflation
THE GUARDIAN: Financial markets expect 0.5 percentage point increase as fears mount that UK is about to enter long recession
The Bank of England is poised to increase the cost of borrowing for households and businesses at its interest meeting today, as fears mount that the UK economy is about to enter a long recession.
Financial markets expect a 0.5 percentage point increase in the central bank’s base rate to 3.5% as the monetary policy committee seeks to combat inflation.
The consumer prices index (CPI) fell back from 11.1% in October to 10.7% last month, according to data released Wednesday, mainly from weaker increases in petrol, clothing and food, but remains well above the BoE’s 2% target.
Jeremy Hunt has indicated he will welcome a tough stance on rates by officials at Threadneedle Street after he said bringing down inflation was his main mission. » | Phillip Inman | Wednesday, December 14, 2022
The Bank of England is poised to increase the cost of borrowing for households and businesses at its interest meeting today, as fears mount that the UK economy is about to enter a long recession.
Financial markets expect a 0.5 percentage point increase in the central bank’s base rate to 3.5% as the monetary policy committee seeks to combat inflation.
The consumer prices index (CPI) fell back from 11.1% in October to 10.7% last month, according to data released Wednesday, mainly from weaker increases in petrol, clothing and food, but remains well above the BoE’s 2% target.
Jeremy Hunt has indicated he will welcome a tough stance on rates by officials at Threadneedle Street after he said bringing down inflation was his main mission. » | Phillip Inman | Wednesday, December 14, 2022
Thursday, November 03, 2022
Bank of England Hikes Interest Rates to 3% in Biggest Rise since 1989
THE GUARDIAN: Bank fears 0.75 percentage point rise may push UK economy into longer and deeper recession than the 1930s
The Bank of England has increased the cost of borrowing by 0.75 percentage points to 3%, despite predicting that higher interest rates would push the economy into the longest recession since the 1930s.
In a split vote, the central bank’s monetary policy committee (MPC) voted by a 7-2 majority for the biggest increase in rates since 1989 to combat an inflation rate that hit 10.1% in September.
The Bank blamed higher energy prices and a tight labour market for the decision to increase interest rates, matching rises in the last week by the US Federal Reserve and the European Central Bank. » | Phillip Inman | Thursday, November 3, 2022
Bank of England warns of longest recession since the 1930s: Interest rate rise to 3% is biggest since 1989 and fears UK economy may go into longer, deeper recession »
The Bank of England has increased the cost of borrowing by 0.75 percentage points to 3%, despite predicting that higher interest rates would push the economy into the longest recession since the 1930s.
In a split vote, the central bank’s monetary policy committee (MPC) voted by a 7-2 majority for the biggest increase in rates since 1989 to combat an inflation rate that hit 10.1% in September.
The Bank blamed higher energy prices and a tight labour market for the decision to increase interest rates, matching rises in the last week by the US Federal Reserve and the European Central Bank. » | Phillip Inman | Thursday, November 3, 2022
Bank of England warns of longest recession since the 1930s: Interest rate rise to 3% is biggest since 1989 and fears UK economy may go into longer, deeper recession »
Saturday, October 15, 2022
Mini-budget Will Likely Mean Higher Interest Rates, Warns Bank of England Governor
THE GUARDIAN: Andrew Bailey says UK borrowers can expect to feel impact of Truss government’s tax and spending decisions
Governor of the Bank of England, Andrew Bailey, says extra stimulus in last month’s mini-budget would force the Bank into tougher-than-expected action. Photograph: Drew Angerer/Getty Images
UK borrowers can expect to face higher interest rates as a result of the Truss government’s tax and spending decisions during its six weeks in power, the governor of the Bank of England has warned.
Despite the U-turn on corporation tax on Friday that saw the sacking of Kwasi Kwarteng as chancellor, Andrew Bailey said the extra stimulus provided in last month’s mini-budget would add to inflation and force the Bank into tougher-than-expected action.
Bailey said he had impressed on the new chancellor, Jeremy Hunt, the need for the public finances to be sustainable and that there had been a “clear and immediate meeting of minds”. Hunt used his first interview to stress mistakes made by Truss would require “difficult decisions” to be made. » | Larry Elliott | Saturday, October 15, 2022
UK borrowers can expect to face higher interest rates as a result of the Truss government’s tax and spending decisions during its six weeks in power, the governor of the Bank of England has warned.
Despite the U-turn on corporation tax on Friday that saw the sacking of Kwasi Kwarteng as chancellor, Andrew Bailey said the extra stimulus provided in last month’s mini-budget would add to inflation and force the Bank into tougher-than-expected action.
Bailey said he had impressed on the new chancellor, Jeremy Hunt, the need for the public finances to be sustainable and that there had been a “clear and immediate meeting of minds”. Hunt used his first interview to stress mistakes made by Truss would require “difficult decisions” to be made. » | Larry Elliott | Saturday, October 15, 2022
Friday, October 14, 2022
Friday, October 07, 2022
Global Fallout from Rate Moves Won’t Stop the Fed
THE NEW YORK TIMES: The Federal Reserve, like many central banks, sets policy with an eye on the domestic economy. Its battle to control prices is causing pain abroad.
The Federal Reserve has embarked on an aggressive campaign to raise interest rates as it tries to tame the most rapid inflation in decades, an effort the central bank sees as necessary to restore price stability in the United States.
But what the Fed does at home reverberates across the globe, and its actions are raising the risks of a global recession while causing economic and financial pain in many developing countries.
Other central banks in advanced economies, from Australia to the eurozone, are also lifting rates rapidly to fight their inflation. And as the Fed’s higher interest rates attract money to the United States — pumping up the value of the dollar — emerging-market economies are being forced to raise their own borrowing costs to try to stabilize their currencies to the extent possible.
Altogether, it is a worldwide push toward more expensive money unlike anything seen before in the 21st century, one that is likely to have serious ramifications. » | Jeanna Smialek and Alan Rappeport | Friday, October 7, 2022
The Federal Reserve has embarked on an aggressive campaign to raise interest rates as it tries to tame the most rapid inflation in decades, an effort the central bank sees as necessary to restore price stability in the United States.
But what the Fed does at home reverberates across the globe, and its actions are raising the risks of a global recession while causing economic and financial pain in many developing countries.
Other central banks in advanced economies, from Australia to the eurozone, are also lifting rates rapidly to fight their inflation. And as the Fed’s higher interest rates attract money to the United States — pumping up the value of the dollar — emerging-market economies are being forced to raise their own borrowing costs to try to stabilize their currencies to the extent possible.
Altogether, it is a worldwide push toward more expensive money unlike anything seen before in the 21st century, one that is likely to have serious ramifications. » | Jeanna Smialek and Alan Rappeport | Friday, October 7, 2022
Tuesday, September 27, 2022
Kwarteng’s Tax Cuts Will Force ‘Significant’ Interest Rate Rises by Bank of England
THE GUARDIAN: Chief economist says mini-budget will increase inflationary pressure in remarks likely to further spook mortgage borrowers
The Bank of England’s chief economist, Huw Pill, says: ‘It is hard not to draw the conclusion that this [tax cuts] will require a significant monetary policy response.’ Photograph: Bloomberg/Getty Images
A senior Bank of England official has warned “significant” increases in interest rates will have to be imposed by the central bank in response to tax cuts put forward by Kwasi Kwarteng in his mini-budget.
The Bank’s chief economist, Huw Pill, said the chancellor’s planned tax cuts would act as a stimulus and increase inflationary pressures, with the result that interest rates would need to go higher than previously forecast.
“In my view, a combination of the fiscal announcements we have seen will act a stimulus to demand in the economy,” he said. “It is hard not to draw the conclusion that this will require a significant monetary policy response.”
Pill’s remarks are likely to further spook homebuyers and mortgage borrowers near the end of a fixed-rate mortgage about the cost of financing their loans. » | Phillip Inman | Tuesday, September 27, 2022
UK’s cost of borrowing on international markets overtakes Greece and Italy: Five-year British government bonds fall dramatically as traders price in higher risk of default on debt »
A senior Bank of England official has warned “significant” increases in interest rates will have to be imposed by the central bank in response to tax cuts put forward by Kwasi Kwarteng in his mini-budget.
The Bank’s chief economist, Huw Pill, said the chancellor’s planned tax cuts would act as a stimulus and increase inflationary pressures, with the result that interest rates would need to go higher than previously forecast.
“In my view, a combination of the fiscal announcements we have seen will act a stimulus to demand in the economy,” he said. “It is hard not to draw the conclusion that this will require a significant monetary policy response.”
Pill’s remarks are likely to further spook homebuyers and mortgage borrowers near the end of a fixed-rate mortgage about the cost of financing their loans. » | Phillip Inman | Tuesday, September 27, 2022
UK’s cost of borrowing on international markets overtakes Greece and Italy: Five-year British government bonds fall dramatically as traders price in higher risk of default on debt »
Monday, September 26, 2022
Pound Comes under New Pressure after Bank of England Fails to Raise Rates
THE GUARDIAN: Central bank stops short of emergency rate hike and instead says it will make full assessment in November
The Bank of England issued a statement in response the pound’s sharp fall on currency markets.Photograph: James Veysey/Rex/Shutterstock
The government was struggling to prevent a full-scale loss of financial market confidence in its economic strategy on Monday evening after the Bank of England’s decision to rule out an emergency rise in interest rates prompted fresh selling of the pound.
Attempts by Threadneedle Street and the Treasury failed to repair the damage caused by Kwasi Kwarteng’s mini-budget last Friday, with sterling falling to a record low against the US dollar.
Within minutes of the Bank saying that it intended to wait until November before responding to the recent turbulence, the pound had dropped two cents against the dollar and was within three cents of the record low of $1.03 hit in Far East trading overnight. » | Larry Elliott, Economics editor and Rowena Mason, Deputy political editor | Monday, September 26, 2022
Markets warn sterling slump could lead UK interest rates to triple by next year: Analysts expect Bank of England to convene meeting to raise rates with further increase in November »
Isn’t this Governor being rather lily-livered? – © Mark Alexander
The government was struggling to prevent a full-scale loss of financial market confidence in its economic strategy on Monday evening after the Bank of England’s decision to rule out an emergency rise in interest rates prompted fresh selling of the pound.
Attempts by Threadneedle Street and the Treasury failed to repair the damage caused by Kwasi Kwarteng’s mini-budget last Friday, with sterling falling to a record low against the US dollar.
Within minutes of the Bank saying that it intended to wait until November before responding to the recent turbulence, the pound had dropped two cents against the dollar and was within three cents of the record low of $1.03 hit in Far East trading overnight. » | Larry Elliott, Economics editor and Rowena Mason, Deputy political editor | Monday, September 26, 2022
Markets warn sterling slump could lead UK interest rates to triple by next year: Analysts expect Bank of England to convene meeting to raise rates with further increase in November »
Isn’t this Governor being rather lily-livered? – © Mark Alexander
UK Bonds Slump after Pound Plunges to Record Low against Dollar – Business Live
THE GUARDIAN: Economists suggest Bank of England may need an emergency interest rate hike, as gilts slide and sterling slumps to a record low against the US dollar
Speculation of an emergency Bank of England rate hike is giving the pound some support, agrees Matthew Ryan, head of market strategy at global financial services firm Ebury » | Graeme Wearden | Monday, September 26, 2022
Pound hits all-time low against dollar after mini-budget rocks markets: Odds of sterling hitting parity with dollar jump, as analysts say UK bond market ‘getting smoked’ by giveaway »
Speculation of an emergency Bank of England rate hike is giving the pound some support, agrees Matthew Ryan, head of market strategy at global financial services firm Ebury » | Graeme Wearden | Monday, September 26, 2022
Pound hits all-time low against dollar after mini-budget rocks markets: Odds of sterling hitting parity with dollar jump, as analysts say UK bond market ‘getting smoked’ by giveaway »
Thursday, September 22, 2022
UK in Recession and Further Interest Rate Hikes on Their Way, Bank Warns Kwarteng
THE GUARDIAN: Threadneedle Street makes clear on eve of tax-cutting mini-budget that plans risk triggering more rate rises
One Whitehall source described the chancellor’s mini-budget as having ‘more rabbits than Watership Down’. Photograph: Toby Melville/Reuters
The Bank of England has warned Kwasi Kwarteng the economy is in recession and it will most probably need to push interest rates higher following Friday’s tax-cutting mini budget from the chancellor.
On the eve of a major package of support from the chancellor designed to break what he called the economy’s “cycle of stagnation”, Threadneedle Street said the UK economy was heading for a second consecutive quarter of falling output, with gross domestic product set to shrink 0.1% in the three months to September.
However, with energy and food bills still soaring, and inflation not expected to peak until October, the Bank of England raised the cost of borrowing for a seventh successive meeting of its monetary policy committee (MPC) and made clear the new government’s plans risked triggering more interest rate hikes. » | Larry Elliott, Jessica Elgot and Richard Partington | Thursday, September 22, 2022
The Bank of England has warned Kwasi Kwarteng the economy is in recession and it will most probably need to push interest rates higher following Friday’s tax-cutting mini budget from the chancellor.
On the eve of a major package of support from the chancellor designed to break what he called the economy’s “cycle of stagnation”, Threadneedle Street said the UK economy was heading for a second consecutive quarter of falling output, with gross domestic product set to shrink 0.1% in the three months to September.
However, with energy and food bills still soaring, and inflation not expected to peak until October, the Bank of England raised the cost of borrowing for a seventh successive meeting of its monetary policy committee (MPC) and made clear the new government’s plans risked triggering more interest rate hikes. » | Larry Elliott, Jessica Elgot and Richard Partington | Thursday, September 22, 2022
Wednesday, September 21, 2022
Fed Makes Another Big Rate Increase
THE NEW YORK TIMES: The Federal Reserve raised rates by three-quarters of a point and projected a more aggressive path ahead, suggesting that borrowing costs would be increased to 4.4 percent by the end of the year.
Federal Reserve officials ramped up their battle against the fastest inflation in 40 years on Wednesday, ushering in a third straight supersize rate increase while projecting a more aggressive path ahead for monetary policy, one that would lift interest rates higher and keep them elevated longer.
Central bankers raised their policy interest rate by three-quarters of a percentage point, boosting it to a range of 3 to 3.25 percent. The federal funds rate was set at near zero as recently as March, and the Fed’s increases since then have made for its fastest policy adjustment since the 1980s.
Even more notably, policymakers predicted on Wednesday that they will raise borrowing costs to 4.4 percent by the end of the year — suggesting that they could make another supersize rate move, followed by a half-point adjustment. Officials estimated that rates will climb to 4.6 percent by the end of 2023, up from an estimate of 3.8 percent in June, when they last published estimates. » | Jeanna Smialek | Wednesday, September 21, 2022
Federal Reserve officials ramped up their battle against the fastest inflation in 40 years on Wednesday, ushering in a third straight supersize rate increase while projecting a more aggressive path ahead for monetary policy, one that would lift interest rates higher and keep them elevated longer.
Central bankers raised their policy interest rate by three-quarters of a percentage point, boosting it to a range of 3 to 3.25 percent. The federal funds rate was set at near zero as recently as March, and the Fed’s increases since then have made for its fastest policy adjustment since the 1980s.
Even more notably, policymakers predicted on Wednesday that they will raise borrowing costs to 4.4 percent by the end of the year — suggesting that they could make another supersize rate move, followed by a half-point adjustment. Officials estimated that rates will climb to 4.6 percent by the end of 2023, up from an estimate of 3.8 percent in June, when they last published estimates. » | Jeanna Smialek | Wednesday, September 21, 2022
Saturday, August 27, 2022
Stocks Plunge after Fed Chair Warns of ‘Pain’ from Inflation Fight
THE NEW YORK TIMES: The S&P 500 fell 3.4 percent, its worst daily showing since mid-June, after the Federal Reserve chair spoke about the path ahead for monetary policy.
Wall Street recoiled on Friday, after the head of the Federal Reserve delivered a stern warning that the central bank’s campaign to lower inflation by raising interest rates is “unconditional” even if it leads to pain for households, businesses and in turn stock prices.
The S&P 500 fell 3.4 percent, its worst daily showing since mid-June, taking its losses for the week to 4 percent. The slump was broad, with every sector of the index lower.
Bond investors also quickly adjusted for more rate increases from the Fed, with the two-year Treasury yield, which is sensitive to rising interest rates, moving close to its highest level of the year at 3.44 percent, before easing back to 3.38 percent.
“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Jerome Powell, the Fed chair, said during a speech at the Kansas City Fed’s annual conference in Wyoming. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.” » | Joe Rennison | Friday, August 26, 2022
Daily Business Briefing.
Wall Street recoiled on Friday, after the head of the Federal Reserve delivered a stern warning that the central bank’s campaign to lower inflation by raising interest rates is “unconditional” even if it leads to pain for households, businesses and in turn stock prices.
The S&P 500 fell 3.4 percent, its worst daily showing since mid-June, taking its losses for the week to 4 percent. The slump was broad, with every sector of the index lower.
Bond investors also quickly adjusted for more rate increases from the Fed, with the two-year Treasury yield, which is sensitive to rising interest rates, moving close to its highest level of the year at 3.44 percent, before easing back to 3.38 percent.
“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Jerome Powell, the Fed chair, said during a speech at the Kansas City Fed’s annual conference in Wyoming. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.” » | Joe Rennison | Friday, August 26, 2022
Daily Business Briefing.
Thursday, June 16, 2022
UK Interest Rates Raised to 1.25% by Bank of England
BBC: UK interest rates have risen further as the Bank of England attempts to stem the pace of soaring prices.
Rates have increased from 1% to 1.25%, the fifth consecutive rise, pushing them to the highest level in 13 years.
It comes as finances are being squeezed by the rising cost of living, driven by record fuel and energy prices.
Inflation - the rate at which prices rise - is currently at a 40-year high of 9%, and the Bank warned it could surpass 11% later this year.
The Bank said rising energy prices were expected to drive living costs even higher in October, but added it would "act forcefully" if necessary should inflation pressures persist. » | Dearbail Jordan, Business reporter, BBC News | Thursday, June 16, 2022
Rates have increased from 1% to 1.25%, the fifth consecutive rise, pushing them to the highest level in 13 years.
It comes as finances are being squeezed by the rising cost of living, driven by record fuel and energy prices.
Inflation - the rate at which prices rise - is currently at a 40-year high of 9%, and the Bank warned it could surpass 11% later this year.
The Bank said rising energy prices were expected to drive living costs even higher in October, but added it would "act forcefully" if necessary should inflation pressures persist. » | Dearbail Jordan, Business reporter, BBC News | Thursday, June 16, 2022
Subscribe to:
Posts (Atom)