Market report

Rates tipped to stick after US decides no change

Bank of England
Bank of England rate setters meet to decide the interest rate (pic: Terry Murden)

Expectations have heightened of no change to UK interest rates after the US Federal Reserve made kept its own borrowing costs unchanged for the second time in a row.

The Fed alerted markets to potential future rises, saying it “remains highly attentive to inflation risks” and stressed that it was “strongly committed to returning inflation to its 2% objective”.

However, the Fed’s decision comes a week after the European Central Bank (ECB) paused its own rate hikes, breaking a run of 10 consecutive increases.

The Bank of England is expected to leave rates on hold after announcing no change to the 5.25% rate at its last meeting and markets expect one more rise before they are cut in the second half of next year.

Get an update on the Bank of England’s decision here

Corporate news was led by a profit upgrade from Next which improved sentiment towards retailers. Its shares rose 248p, or 3.6%, to 7132p, helping to lift Marks & Spencer by 7.25p, or 3.3%, to 224p.

Shares at luxury car maker Aston Martin Lagonda went into reverse, falling 19.5p, or 8.9%, to 199.25p, after it announced a quarterly loss and cut its volume outlook.

Commodities stocks took a hit after BP’s disappointing third-quarter results on Tuesday prompted analysts at JP Morgan to cut their recommendation on the shares to “underweight” and they promptly fell 8.25p, or 1.6%, to 494.5p.

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