Carney Warns Of Higher & Faster Rate Rises

Thursday, 8th February: Voting a unanimous 9-0 to keep rates on hold at 0.5%, the Bank of England looks set to tackle meeting its inflation target of 2% (latest reading 3.0%) over a 2 year period, rather than 3, hinting that the tightening interest rates could set to rise sooner and higher than what they thought when they last met in November. It looks like a rate hike could come as soon as May, while further hikes over the rest of 2018 haven’t been discounted as growth forecasts over the next 3 years have been slightly raised. Sterling strengthened against major currencies, rising to >€1.14 and $1.40, ultimately pushing the FTSE 100 lower, although the 250 didn’t escape the lower trend either; ending the day -1.49% and -1.85% respectively. Gilt yields rallied to a 2-year high while rises were also recorded across US Treasury and German Bund yields.

After reporting consistent losses since listing in 2013,Twitter shares have surged after the social media giant reported its maiden quarterly net profit, . Net profit has been recorded at $91.1m for the fourth quarter of 2017, up from a loss of $167.1m in the same period of 2016, with the company expecting to be profitable for the full year 2018. Shares are up c.19% at the time of writing, with 330m active users reported a month, a rise of 4% year-on-year.

UK supermarkets over the last few weeks have been announcing job cuts and today UK Department store Debenhams followed suit, announcing they plan to 320 store management jobs, around a quarter of Debenhams’ store management jobs, as it looks to cut costs. Last month Debenhams issued a profit warning after a disappointing Christmas trading update, wiping a quarter of the shares’ value off the market. Shares close +0.48% today.

Major indices in Europe closed lower while similar sentiment is being felt in the US as equity markets trade lower at the time of writing. Brent oil has fallen back 1.7% (at time of writing), falling back below $65/bbl for the first time since late December.

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