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FTSE 100 Live: Stocks called higher after as expected US rate rise

Published 27/07/2023, 06:56
© Reuters. FTSE 100 Live: Stocks called higher after as expected US rate rise
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Proactive Investors - Blue-chips are set to open higher on Thursday following the as-expected 25 basis point interest rate in the US which economists increasingly believe will be the last in this cycle.

Spread betting companies are calling the FTSE 100 up by around 15 points after closing down 14.91 points at 7,676.89 on Wednesday.

Investors are also preparing for another raft of updates from leading UK companies with Barclays (LON:BARC), Centrica (LON:CNA), Drax Persimmon (LON:PSN), BT (LON:BT) and Rentokil Initial (LON:RTO) among the big names reporting today.

New York stocks closed Wednesday mixed in choppy trading after the latest interest rate increase by the Federal Reserve, which took borrowing costs to their highest level in 22 years.

James Knightley at ING Economics said: "The Fed unanimously hiked its policy interest rate range 25bp as widely expected with the statement retaining the phrasing that further policy firming "may be appropriate".

"With two months' worth of data to come before the next FOMC meeting, we suspect evidence of slowing inflation and softer activity won't make that necessary," he thinks.

The Fed's chair Jerome Powell was coy when it came to future policy. He did not commit to another hold in September, but did not really choreograph another hike either, as he affirmed a "data-dependant" approach to future decisions.

Leaving the door open for future hikes this year, Powell ruled out cuts until the next at the earliest. "We will be comfortable cutting rates when are comfortable cutting rates", he said.

It's the ECB’s turn today with a similar 25 basis point rise flagged.

Read more on Proactive Investors UK

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