Welcome back to City AM‘s FTSE 100 liveblog.
The UK’s blue-chip index is set to jump on Thursday morning, according to futures from IG.
Investors on both sides of the Atlantic are bracing for crunch interest rate decisions, as fears over surging energy prices, artificial intelligence and government debt are coming to a head.
The Bank of England is expected to leave interest rates unchanged at 3.75 per cent when its Monetary Policy (MPC) meets on Thursday. Its decision will be announced at noon, and investors will be closely watching the comments made by governor Andrew Bailey to see if he hints that a rate hike is on the near horizon.
Last week, Bailey told MPs that inflation risks are “to the upside,” warning that energy prices “could be higher still” as a lasting resolution to the Iran war and the blockage of the Strait of Hormuz continues to evade negotiators in the Middle East.
“The conflict is still going on and it is also causing a high level of energy prices and quite a bit of volatility in energy prices,” Bailey said, adding that turbulence was “feeding through into financial markets”.
Economists have speculated that the Bank of England is likely to raise interest rates once before Christmas and as many as three more times before July next year, meaning that interest rates could be one per cent higher this time next year.
Over in the US, the Federal Reserve announced on Wednesday that it would hike interest rates by 25 basis points, defying pressure from the White House.
We’ll be bringing you all the latest market updates and analysis.
This morning’s top stories:
- Burnham warns of ‘challenging’ Budget and hits back at ‘socialists with TikTok’ jibe
- Marks and Spencer shares slide as investors brace for inflation hit
- Santander and BMW in High Court spat over motor finance dispute
- British AI firm Synthesia warns ‘sci-fi’ fears risk chocking UK tech
- Home secretary donor reprimanded by accountancy regulator
