Weekly round up
The UK FTSE 100 suffered its largest one-day loss in three months yesterday as the Bank of England raised interest rates by 0.25%, bringing the benchmark interest rate to 1.25%. The FTSE 100 fell over 3.14% taking the index to the lowest level since the Ukraine war started, closing at just over 7,000.
Minutes from the UK monetary policy committee painted a grim picture for both growth and inflation. The committee warned inflation would climb to over 11% by the end of the year, adding that the UK economy was already weakening, thereby raising the spectre of stagflation.
The US Federal Reserve announced a 0.75% rate increase on Wednesday evening, the largest increase since 1994, bringing their target rate to 1.5%. Markets responded positively initially as previous sessions had predicted the jumbo rate increase. The gains on Wednesday were quickly given away on Thursday with all major US indices down heavily for the week. At close on Thursday all three major US indices were significantly lower; the Dow Jones Industrial average fell 2.4%, S&P 500 down 3.2% and the tech-heavy Nasdaq declined 4.1%.
Unsurprisingly, the MSCI All-World Index closed 5.7% lower on Thursday, the worst weekly performance since the depths of the pandemic in March 2020.
In the commodities space, oil has shown a modest decline on the week with Brent Crude trading 2% lower on the week at $120 a barrel at the time of writing whilst gold remained relatively unchanged on the week trading at $1,849 an ounce.
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