Thank you for tuning in. This week is significant for interest rates, as economists are divided on what the Bank of England will decide when they make their announcement on Thursday. There is hope for the first rate cut in four years, as job vacancies dropped by almost 20% last month, hitting their lowest level since March 2021, according to Adzuna. Traders are betting with a 71% certainty that interest rates will be reduced from 5.25% to 5% on Thursday. Money markets are expecting two 0.25 percentage point cuts in the Bank Rate this year, bringing borrowing costs down from their 16-year highs to 4.75%.
Additionally, here are five things to kickstart your day:
1) Landline phones are becoming obsolete as most households now rely on smartphones.
2) Mike Lynch plans to support wrongly convicted Britons in the US following his fraud acquittal.
3) Unions are advocating for civil servants to be allowed to work from home.
4) Women in their 50s are facing a potential pension crisis due to caring responsibilities and inadequate savings.
5) BT’s rival is being sued over an alleged mishandled broadband rollout by Essex County Council.
Moving on to the latest developments, Asian stocks opened the week positively ahead of interest rate decisions in the UK, US, and Japan after a strong rally on Wall Street. The Nikkei 225 index in Tokyo surged 2.5% to 38,587.87. The Bank of Japan is expected to raise its key interest rate from near zero to possibly up to 0.3% during its monetary policy meeting on Wednesday. The Federal Reserve in the US is likely to keep its benchmark rate unchanged but may hint at a rate cut in September.
The Japanese yen has weakened against the US dollar in anticipation of these changes, with the dollar trading at 153.42 yen early Monday. Hong Kong’s Hang Seng and Shanghai Composite index showed gains, with industrial profits in China rising by 3.5% in the first half of 2024. Australia’s S&P/ASX 200 and South Korea’s Kospi also saw positive movements.
In Europe, gas prices increased despite weak demand, with benchmark futures rising by 2.2% to €32.48 per megawatt-hour following an outage at an LNG export plant in Australia. Eni SpA reported a 16% decrease in consumption during the second quarter.
On the political front, US Vice President Kamala Harris experienced a rise in her favorability ratings after President Joe Biden announced he would not seek re-election and endorsed her. An ABC News/Ipsos poll showed Harris’ rating increased from 35% to 43% in a week, with her campaign raising $200m. Meanwhile, Republican candidate Donald Trump’s favorability rating declined from 40% to 36% during the same period.