The Bank of England has cut interest rates for the first time in seven years, and will revive a broad stimulus program to try to prevent Brexit tipping the United Kingdom economy into recession.
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“I think it’s another reason for the Fed not to hike”.
Barclays, meanwhile, said that the low interest rates would be passed onto consumers, promising a mortgage rate cut of 0.25 percent.
US stocks are mostly higher Thursday as the market continues the small moves it’s made in the last few weeks.
“Now what the Fed will tell you is that the economics in the USA are different and that we’ve had generally stronger growth, generally lower unemployment”.
“We may need the jobs report to come in much higher than expected to revive rate increase prospects for September and lift the dollar, given how weak the second quarter US GDP was”, wrote Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo. The Standard & Poor’s 500 index is up 2 points, or 0.1 percent, to 2,166.
So zero growth in the middle of 2017 is in the darkest green section, just, but you have to go to the lighter green to see a recession that year. The Shanghai Composite .SSEC was little changed, poised for a 0.1 percent weekly gain.
Markets appeared to be surprised by the scale of the stimulus package unveiled Thursday – the pound dropped 1.4% to $1.31, while the FTSE 100 index of leading stocks gained 1.5%. The U.S. Labor Department will release a broad snapshot of the labor market with economists forecasting a seasonally adjusted July payroll gain of 179,000, in line with the pace of job creation so far this year. The measures seemed to exceed the expectations of investors, and the bank said the measures could be expanded later if that proves necessary.
But he also made clear he would not support the introduction of negative interest rates, unlike central banks in Europe and Japan. During the financial crisis, cutting rates to 0.5 percent had a bigger impact because rates stood at 5 percent. Aviva (AV) rose 5% after the British insurer boosted its dividend by 10% following the strong performance of its life insurance unit in the first half of the year, the Financial Times said.
Global benchmark Brent crude futures slipped 0.5% to $44.07, heading for a weekly rise of 3.8%. Ball, which makes metal and plastic packaging for food and drink companies, jumped $8.41, or 12 percent, to $78.51 and packaging company WestRock rose $1.77, or 4.2 percent, to $43.72.
Oil prices rose for a second straight day and US crude advanced firmly above the $40 a barrel mark on short-covering and after a modest stockpile drop at the delivery hub for USA crude futures. Germany’s DAX and France’s CAC 40 both rose 0.6 percent. Brent crude, which is used to price worldwide oils, dropped 34 cents to $42.76 a barrel in London.
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The pound fell 1.38% against the dollar at $1.3140 at 1500 BST as a result. The euro gained 0.1 percent to $1.1143 EUR=EBS, set to end the week 0.2 percent lower.
