Stock markets climb, as London awaits economic forecasts

Stock markets climb, as London awaits economic forecasts

November 7, 2019 0 By mykenyancareers
2f60d7b4874a7dbb86c366646ce73d57fb0961a4 1 - Stock markets climb, as London awaits economic forecasts
Bank of England expected to hold its main interest rate at 0.75 percent/AFP

LONDON, United Kingdom, Nov 7 – Stock markets rose on Thursday, boosted once more by hopes of a China-US trade deal, while the pound steadied as the Bank of England prepared to give its latest forecasts for the UK economy ahead of the country’s general election.

The Bank of England is expected to announce that its main interest rate will remain at 0.75 percent following a regular monetary policy meeting, its final vote on borrowing costs before Britain’s national poll on December 12 aimed at unlocking Brexit.

Alongside the announcement, due at 1200 GMT, the BoE will give its latest UK economic growth and inflation forecasts.

Earlier Thursday, the Conservative government cancelled a planned release of its own updated economic forecasts just one hour before publication had been due.

“This will no longer go ahead as the Cabinet Secretary has concluded that this would not be consistent with the Cabinet Office’s general election guidance,” the Office for Budget Responsibility said in a statement.

Later, around 1115 GMT, London’s benchmark FTSE 100 stocks index was up 0.2 percent compared with Wednesday’s closing level.

The pound was up at $1.2864 from $1.2855 late in New York on Wednesday.

The euro climbed 86.17 pence from 86.09 pence

In the eurozone, Frankfurt’s DAX 30 stocks index grew 0.8 percent and the Paris CAC 40 won 0.2 percent.

“All eyes will be on the Bank of England today,” said Joshua Mahony, senior market analyst at IG trading group.

“The political and economic uncertainty of the upcoming weeks will continue to hold back the possibility of any shift in policy, with the committee expected to hold off until they know what direction the UK is heading.”

Mahony said that with the BoE publishing also its economic estimates, “there is likely to be sterling volatility in response to any shift in growth and inflation forecasts”.

But he added that “markets should take any forecasts with a pinch of salt given that they are based on a specific Brexit scenario which could be vastly different from the actual outcome given that all ends of the Brexit spectrum remain a possibility post-election”.

Equity markets in general, along with oil prices, meanwhile rose Thursday after China said it had agreed with the United States on a plan to gradually remove each other’s tariffs, fuelling hopes they can resolve a trade war that has roiled the global economy.

Broad optimism that the economic superpowers would soon complete part one of a wider agreement has been the basis of a rally in global equities for several weeks.

Key figures around 1115 GMT 

London – FTSE 100: UP 0.2 percent at 7,407.60 points

Frankfurt – DAX 30: UP 0.8 percent at 13,278.63

Paris – CAC 40: UP 0.2 percent at 5,876.70

EURO STOXX 50: UP 0.3 percent at 3,700.37

Tokyo – Nikkei 225: UP 0.1 percent at 23,330.32 (close)

Hong Kong – Hang Seng: UP 0.6 percent at 27,847.23 (close)

Shanghai – Composite: FLAT at 2,978.71 (close)

New York – Dow: FLAT at 27,492.56 (close)

London – FTSE 100: UP 0.3 percent at 7,418.84

Pound/dollar: UP at $1.2864 from $1.2855 at 2100 GMT

Euro/pound: UP at 86.17 pence from 86.09 pence

Euro/dollar: UP at $1.1085 from $1.1066

Dollar/yen: UP at 109.15 yen from 108.98 yen

Brent North Sea crude: UP 1.3 percent at $62.56 per barrel

West Texas Intermediate: UP 1.3 percent at $57.07 per barrel