Bank of England “sticks” on Bank Repo Rate…and other news

S e w e l l B r y d e n G u n n

Bank of England Monetary Policy Committee opts for “no change” to the bank base rate.

European shares were slightly higher on this Thursday afternoon having fluctuated for much of the day’s sessions as investors responded to the latest announcements from the Bank of England and US Federal reserve.

The Bank of England announced it was holding interest rates at a record low of 0.5% with asset purchases unchanged at a total of £375 billion which is $629 billion – this was as expected and came after the International monetary fund upped its forecast for UK growth on Tuesday.
At the same time, investor and analyst eyes are on Greece’s first bond sale in four years – looking for evidence of a renewed confidence in a European Union member state that has been beset with economic woes in the recent past? Greece offered 3 billion euros  of 5 year bonds yielding 4.95% attracting some twenty billion euros of demand.
Meanwhile the International Monetary Fund (IMF) believes global activity has broadly strengthened and is expected to improve further in 2014–15, according to the IMF’s April 2014 World Economic Report, with much of the impetus for growth coming from advanced economies. Although downside risks have diminished overall, it suggests, lower-than-expected inflation poses risks for advanced economies, there is increased financial volatility in emerging market economies, and increases in the cost of capital will likely dampen investment and weigh on growth.
Today the FSTE 100 index opened with a dip shortly after followed by a rise to just below 6690 before nose diving down to below the “waterline” of yesterday’s close just after mid morning. The index recovered to just below  6670 over the lunch period before coming off slightly at around 6660.
The last five days have been a mixed bag so far – with yesterday’s index going down as far as 6550 before closing at 6635.61

Photo Credit: SBG PhotoStock

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