The infoshot to help kick-start your week
- The Bank of England held interest rates at 5.25 per cent but hinted that it may be ready to consider cutting rates for the first time since inflation surged. Andrew Bailey, the governor of the Bank of England, said that the bank will ‘keep under review’ how long rates should be held at their current levels. Gilt yields, which move inversely to prices, rose briefly after the midday rate announcement before falling later in the day.
- Jay Powell, the Chairman of the US Federal Reserve, tried to cool speculation in the markets that the Federal Reserve would cut interest rates as early as March. Speaking after holding rates between 5.25 per cent and 5.5 per cent, Powell noted that there needs to be greater confidence that inflation was sustainably lower while he added that he doesn’t think that the US will “reach a level of confidence by the time of the March meeting”.
- The US economy added 353,000 jobs in January which came in twice as many as was forecasted. Economists expected 180,000 jobs to be added according to an LSEG survey and this labour market strength backs up Powell’s suggestion earlier in the week that it may be too early to cut interest rates. The data led traders to reduce their bets on an interest rate cut in May with the odds falling to 88 per cent after being fully priced into the markets before the report.
- UK January Halifax House Price Index data released, Wednesday 7th February 2024 at 7:00am.
- US Initial Jobless claims data released, Thursday 8th February 2024 at 1:30pm.
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