US on target for interest rate rise

Fri close: An interest rate hike in the US remains likely despite job creation coming in weaker than expected.

Together with the Bank of England’s downward revision to inflation estimates UK equities ended lower.

The US added 215,000 jobs in July, falling short of forecasts of 225,000. The unemployment rate held at 5.3%, as predicted by analysts.

Even so, analysts believe the figures give the Federal Reserve reason to lift interest rates for the first time in nine years.

In the UK, investors continued to digest the BoE’s ‘Super Thursday’. The BoE’s Inflation Report, showed officials expect annual inflation to tick back up to the 2% target by the third quarter of 2017 if interest rates rise in line with market expectations.

The Office for National Statistics revealed that the trade deficit in goods alone grew to £9.18bn from £8.4bn, less than the £9.3bn predicted by analysts. The total trade deficit rose to £1.6bn from £885m, compared to estimates of £1.7bn.

Royal Dutch Shell advanced on news it has agreed to sell its 75% stake in Tongyi Lubricants in China to Huo’s Group and the Carlyle Group for an undisclosed sum

On the downside, ITV’s shares dropped on read-across from US peers, after Viacom, Walt Disney and 21st Century Fox suffered heavy losses on Thursday.

William Hill declined after reporting a 35% fall in pre-tax profit to £78.7m and flat net revenue for the six months to 1 July as it battled through a period of major regulatory and taxation disruption.

The FTSE 100 closed down 0.42% at 6,718.49.

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