6-3 Vote Keeps UK Rate Rise On Hold

Thursday, 21st June: There was a positive sentiment as London indices opened as investors waited for the MPC’s latest decision on UK interest rates at midday. A 6-3 vote to keep rates at 0.5% following weak data in the UK sent the pound higher against major currencies, in turn sending the FTSE lower, with falls continuing throughout the afternoon, closing -0.93%. The 6-3 vote to keep rates stationary surprised many as BoE chief economist Andy Haldane voted for the first time against the majority since he joined the MPC in June 2014. Members are set to next set to meet in early August, with the split leaving an open door to a summer rise. Sterling remains higher against both the euro and US dollar at the time of writing, up 0.36% and 0.58% at €1.14 and $1.32 respectively.

Oil continued its turbulent week ahead of tomorrow’s major producer meeting in Vienna with brent prices falling 2% to $73.65/bbl as the day continues. The Saudi Energy Minister has said a 1 million bpd (barrels per day) production increase would be sufficient to prevent a deficit in the second half of 2018. More likely is a production rise of 600,000-800,000 bpd as some OPEC members would be unable to ramp up production to such a level. Russia, a non-OPEC member, is calling for a 1.5m bps rise.

Dixons Carphone has had its fair share of bad news this year. Only last week the group revealed it revealed it had been victim of cybercrime, comprising 5.9m bank cards. Today’s full year results included a fall in annual profits, further store closure announcements and a warning of further profit falls in the current financial year. The fall in financial performance has been blamed on a tough UK retail market, while the mobile phone division has been difficult. Shares rose as many saw the results as better than expected, with conviction in the new management turning the troubled retailer around sending shares up 2.36%.

Leave a Reply