The Bank of England is on the verge of cutting interest rates for the first time in more than four years today.
In what is expected to be a tightly contested decision announced at midday on Thursday, members of the nine-strong monetary policy committee (MPC) are poised to lower borrowing costs from a 16-year high of 5.25%.
Investors in the City think the ratesetters will be unable to separate themselves in the ballot. In such a scenario, Andrew Bailey, the governor of the Bank of England, will cast the deciding vote.
Traders now think that there is a more than 60% chance of a cut on Thursday, according to The Times.
Concerns about resilient domestic inflation, however, could steer the MPC towards keeping interest rates unchanged for the eighth time in a row.
Services inflation, which the committee monitors closely, remained unchanged at 5.7%in June, well above the Bank of England’s forecasts. Wage growth also remains elevated at 5.7%.
An interest rate cut on Thursday is likely to be leveraged by the Labour government as a sign that the economy has already started to normalise during its short tenure.
Sir Keir Starmer, the prime minister, has consistently blamed the Conservatives, and specifically Liz Truss’s mini-budget, for forcing interest rates higher.
FTSE 100
The UK's flagship share index, the FTSE 100, was up 50-points 8,404 shortly after opening this morning.
Brent crude oil futures were up 0.79%, trading at $81.48 a barrel.
Companies reporting today
Anheuser-Busch Inbev | Q2 Results |
Amazon | Q2 Results |
Apple | Q3 Results |
BAE Systems | Half Year Results |
Barclays | Half Year Results |
Coats Group | Half Year Results |
Elementis | Half Year Results |
F&C Investment Trust | Half Year Results |
Haleon | Half Year Results |
London Stock Exchange Group | Half Year Results |
Melrose | Half Year Results |
Mondi | Half Year Results |
Next | Q2 Trading Statement |
Rolls-Royce | Half Year Results |
Schroders | Half Year Results |
Serco Group | Half Year Results |
Shell | Half Year Results |
Smith & Nephew | Half Year Results |
Vesuvius | Half Year Results |
Wizz Air Holdings | Q1 Results |