Stubbornly-high inflation, jitters around more rate hikes and concerns about a worsening global economic environment have kept London stocks range-bound following extensive losses last month.Īmong individual movers, FirstGroup (FGP.L) jumped 13.9% after the transport operator beat annual profit forecasts. Precious metal miners (.FTNMX551030) and chemicals (.FTNMX552010) were the worst-hit sectors, losing 1.4% and 1.7% respectively. The broader homebuilders index (.FTNMX402020) shed 0.9%. Homebuilder Crest Nicholson Holdings (CRST.L) dropped 7.1% after warning of further slowdown in the British housing market. Vodafone Group (VOD.L) and Sainsbury (SBRY.L) were amongst top decliners, falling 5.5% and 3.8% respectively, as the telecom firm and Britain's second-largest supermarket chain traded without the entitlement for divided. Growing rate hike bets pushed the pound nearly 1% higher, further pressuring the exporter-heavy FTSE 100 index. Traders have nearly fully priced in a 25-basis point hike by the BoE in two weeks time. "The headwind from tighter monetary policy and generally tighter financial conditions is building up again," said Andrea Cicione, head of research at TS Lombard.Ĭicione said the surprise hikes by the RBA and BoC potentially give more incentive for the Bank of England to hike again. Surprise rate hikes by the Bank of Canada and the Reserve Bank of Australia this week have spooked investors globally, sparking concerns that major global central banks could stick to their rate tightening cycles for longer. The internationally-focused FTSE 100 (.FTSE) slipped 0.3%, while the domestically-focused FTSE 250 (.FTMC) midcap index lost 0.2%. The next rate-setting meeting is scheduled for July 21.June 8 (Reuters) - British equities fell on Thursday, as sentiment around global interest rates remaining higher for a longer period pressured stocks, while Vodafone and Sainsbury going ex-dividend contributed to losses. Further budget deficit expansion could require tighter monetary policy, the bank said.Ĭentral Bank Governor Elvira Nabiullina was due to give a media briefing at 1200 GMT. Russia's budget spending is well above plan this year, pushing the deficit to $42 billion for January-May, data showed this week. Inflation risks such as a weakening rouble, rapid wage growth and a recovery in consumer demand have picked up since the last meeting in late April, said Mikhail Vasilyev, chief analyst at Sovcombank. The central bank had turned its hawkish rhetoric up a notch, said Liam Peach, Senior Emerging Markets Economist at Capital Economics, describing the bank's signal as "the strongest signal yet that policy tightening is in the pipeline". "Accelerating fiscal spending, deteriorating terms of foreign trade and the situation in the labour market remain pro-inflationary risk drivers," the bank said. On Friday it said the overall balance of inflation risks has "tilted even more to the upside". The bank has maintained a hawkish stance this year, unable to find room to ease monetary policy. The central bank has now held rates steady at 7.5% for six meetings in a row since the last cut in September. That jump followed Russia's launch of what it calls its "special military operation" in Ukraine, and the imposition of wide-ranging Western sanctions in response. In a series of rate cuts last year, the bank gradually reversed an emergency hike that took the rate to 20% in late February 2022. "Given gradually rising inflationary pressures, the Bank of Russia holds open the prospect of increasing the key rate at its next meetings to stabilise inflation close to 4% in 2024 and further on," the central bank said in a statement. The Bank of Russia forecasts year-end inflation at 4.5-6.5% in 2023, returning to the 4% target in 2024. But it is expected to pick up, with consumer prices rising 0.21% in the week to June 5.įriday's decision to hold the rate at current levels was in line with a Reuters poll and analysts had said that Wednesday's inflation data could lead the bank to issue a tighter signal. MOSCOW, June 9 (Reuters) - Russia's central bank held its key interest rate at 7.5% as expected on Friday, but issued a more hawkish signal in warning of growing inflation pressure and promising to keep rate hikes on the table at upcoming meetings.Īnnual inflation, which spiked to over 20-year highs in 2022, has slowed to below the bank's 4% target in recent months as last year's base effect took hold.
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