The FTSE made no major moves at the open as most investors awaited the Bank of England’s decision on interest rates, due to be announced at midday. Most investors expected a rate cut following the last meeting where the BoE surprised many by holding off from a cut; the weak PMI readings yesterday all but made the decision a ‘dead cert’ and investors weren’t disappointed. At noon the BoE confirmed the historic rate cut from 0.5% to a record low 0.25%, after a unanimous 9-0 vote. This was the first rate cut since 2009 amid the global financial crisis. Alongside this the BoE also announced it would buy £60bn of UK government bonds and £10bn of corporate bonds amongst other measures to keep the UK’s economy on track following the EU referendum decision. Furthermore policymakers expect a further rate cut even closer to zero later in the year.
Ladbrokes reported a £25.2m profit for the first half of the year compared to losses of £51.4m last year. After a tough Cheltenham Festival results such as upsets at the European Championships and others alike have favoured the bookie, soon to be merged with Coral. The bookmaker has stated that they expect a run of customer friendly results to normalise returns, but of course they would say that. Shares finished the day 4.26%.
In terms of the wider index, the FTSE 100 closed 1.59% higher following the rate cut and a solid day for oil that at the time of writing was 2.5% higher in the session. Unsurprisingly sterling fell against most major currencies and again as we write sits 1.28% down versus the euro and 1.43% down against the dollar.
In other news today Nike has announced it will cease selling golf clubs, balls and bags after years of struggling sales. Despite this more investment will be put into the apparel side of the business. This leaves Nike’s latest major signing Rory Mcilory in need of some new sticks, along with fellow pros such as Tiger Woods, you may have heard of him. Nike aren’t the only major sports firm to announce struggles with their golf division, earlier in the year Adidas announced they intended to sell most of their golf business, comprising of the Taylormade, Adams and Ashworth brands. This does however create huge opportunities for brands like Callaway, Ping and Titleist.