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FTSE100 (close): 6331.83 + 149.11 (2.41%)

Interest rates may remain unchanged in 2015

Stock MarketTuesday close: The index of leading shares halted a six-session slide today, defying problems in Russia and encouraged by a drop in UK inflation.

The FTSE 100 index leapt sharply and was only held back by the difficulties in Moscow where attempts were being made to prop up the rouble with a massive rate hike.

“The market will continue to be volatile while there are still concerns about the oil price andRussia,” said Central Markets trading analyst Joe Neighbour.

The inflation rate at home fell to its lowest level in more than 12 years in November, providing a pre-Christmas boost to shoppers and easing pressure on the Bank of England to raise interest rates.
There is now talk that rates may stay on hold for the whole of 2015.
Gerard Lyons, chief economic adviser to the Mayor of London and forcer Standard Chartered Bank economist, today tweeted that “ongoing problems in EZ (eurozone) & falling oil prices & still vulnerable nature of UK & US recoveries mean Fed & BOE (Bank of England) keep rates low for some time. I don’t think the BOE should or will hike in 2015.”

The FTSE 100, which hit a 14-year of 6,904.86 points in early September, has since lost ground and is down by around 8% since the beginning of this year.

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