PREVIOUS TRADING DAY EVENTS 11 May 2023

Announcements  

The Bank of England BOE decided to raise the key interest rate to 4.5 on Thursday as expected and the market did not react too much at that time. Maybe market participants were expecting a surprise that eventually did not take place. A higher increase would make sense since inflation remains sticky and extremely high while the labour market is hot. The BOE Governor Andrew Bailey said the British central bank would stay the course, indicating that the market should confidently expect more rate hikes in the future.

Inflation remained above 10 in March as the U.K. experienced unexpectedly big and persistent prices together with stronger wage growth.

We have to stay the course to make sure inflation falls all the way back to the 2 target, Bailey said at the start of a press conference before stressing that the BoE was not sending any signals about its next moves, which would depend on data.

If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required, the BOE said, maintaining its message from earlier this year.

Energy prices have fallen and the central bank expects inflation to drop to 5.1 by the end of this year from 10.1 in March.

Source httpswww.reuters.comworldukbankenglandraisesrates45inflationslowfall20230511

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