Many economists had expected Forbes to oppose a rate cut after she said last month that the central bank should not panic and instead wait for more data on the scale of Britain’s economic slowdown.
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Technology companies continued to make the biggest gains and oil prices rose for the second day in a row.
The BoE’s rate cut, the first since 2009, was widely expected.
A better-than-expected reading on U.S. private jobs supported a Wall Street rally, with payroll firm ADP reporting that private United States companies added 179,000 jobs in July, slightly better than expected. “To get the market to move higher you need an underpinning of stronger economic growth”.
The Standard & Poor’s 500 index inched up 0.46 points to 2,164.25 while the Nasdaq composite rose 6.51 points to 5,166.25. In addition, the BoE extended its quantitative easing programme by £60 billion, launched a £10 billion corporate bond purchase scheme and pulled the trigger on credit easing, with a new funding scheme for banks. The measures seemed to exceed the expectations of investors.
The Bank of England’s decision to slash its key interest rate in half to a historic low boosted commodities Thursday as investors moved away from safe havens.
The central bank further announced a program of cheap lending to banks to make sure they are financially able to in turn lend to people and businesses at low rates. For 2018 it slashed its forecast to 1.8 percent from 2.3 percent.
SQUARE ONE: Mobile payments company Square climbed after it reported strong second-quarter results and raised its projections for the year. The stock rose $1.19, or 11.4 percent, to $11.63.
Brent crude LCOc1 settled down 2 cents at $44.27 a barrel, while US crude CLc1 settled down 13 cents at $41.80. Brent crude, which is used to price Global oils, dropped 6 cents to $43.04 a barrel in London. It remains more than 2 cents above lows hit in early July. “But the higher the Australian dollar goes, the risk of RBA cutting rates will increase”, Teo said, adding that such prospects could offer an opportunity to sell into the Aussie’s rally.
Spot gold prices were up 0.42 per cent to $1,363.21 an ounce. According to Tom Leveroni of Nautilus Investment Research, since the start of the 20th century, this is the 10th time that the Dow has slid into a downward streak and historically such falls have negative implications, according to a Business Insider report.
The pound has weakened by about 15 per cent against the Singdollar starting 2016 at S$2.0847.
Sterling gained 0.3 percent to $1.3144 and 0.2 percent against the euro to 84.73 pence.
CURRENCY: The dollar declined to 101.13 yen from Thursday’s 101.21 yen.
In other currency trading, the ICE dollar index, a gauge of the buck against a basket of six rival currencies, was up 0.2% to 95.7850, after spiking in the wake of the BOE decision. If you would like to discuss another topic, look for a relevant article.
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