Thursday, November 2: markets were in a holding pattern with little movement overnight in Asia, and at the open across Europe as investors awaited the announcement and implementation of a first UK rate rise for a decade. The announcement of a 0.25% increase to 0.5% came at midday, prompting an instantaneously drop in sterling of c.0.84% against both the euro and dollar, with both shaping to close out the day over 1.20% lower on the same basis. This reaction came about as the BoE rescinded a warning that rates may need to rise faster than market expectations, with the market reading this as a “dovish” move. Thus, the guidance for just two rate rises between now and into 2020 makes it unlikely rates will be increased in the near term, spooking the market. The announcement also saw the yields on government bonds fall lower as UK stocks rose. According to Bloomberg data, the next rate rise is not expected until August 2018.
Howden Joinery(+5.97%) was the largest gainer on the FTSE 250, as it announced that it remains on track to meet management expectations for 2017, noting that the remaining trading periods in the year will account for no more than 10% of revenue. For the period from June 12 to October 28, Howden UK depots total revenue increased by 8.2% from the same period the year before, reflecting both volume growth and the slowdown in revenue growth in H2 2016. The same period also saw five new depots open, taking the total number of depots in the UK to 658.
Across Europe, indices were mixed at the close with the FTSE 100 +0.90%, the DAX 30 -0.18% and the CAC 40 -0.07%.