Business News: ECB remains resolute as BoE raises rates
By Jenny McCall
14:06, 3 February 2022
Key Points
European Central Bank (ECB) kept policy unchanged, and remains resolute when it comes to interest rate hikes.
Shane O’Neill, head of interest rate trading for for Validus Risk Management, said: “After yesterday’s inflation print out of the EU, the highest recorded since the creation of the single currency, the pressure was on the ECB today. In line with market expectations, they have made no change to their policy and the associated statement is also virtually unchanged from a month earlier.”
- Today, the Bank of England announced that interest rates will increase to 0.5%.
Giles Coghlan, Chief Currency Analyst at HYCM, said: “The Bank of England’s (BoE) decision to raise interest rates today was expected. Recent warnings that inflation could peak at close to 6% by April has the bank acting quickly to raise rates, while Goldman Sachs gave their BoE projections an upgrade this week, recognising that policymakers had their hands tied. This may well turn out to be the quickest interest rate move in 25 years, as the BoE know that this is the only weapon against surging inflation.”
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Top business and economic news
BBVA announced positive earnings news, becoming the latest bank to reveal a major boost to profits. It reported a €5.07bn (£4.2m, $5.7m) profit in 2021, the highest in the past 10 years.
Figures tracking the US labour market were announced today by Oxford Economics: new claims for unemployment benefits have fallen as Covid infections subsided. Continued claims for regular benefits fell 44,000 to 1.63 million in the week ended 22 January.
Markets today
- Stocks: Meta, formally known as Facebook (FB), stock price fell today by over 20%, causing US stock index futures to slump.
- Oil: oil prices were down today, following OPEC+ decision for a March output raise.
- Gold: gold prices eased today, due to a strengthened US dollar and Treasury yields gained.
- Forex: inflation pressures caused the euro and the sterling to weaken today.
- Crypto: Bitcoin fell by over 4% and Ethereum was down by over 5% today in afternoon trading.
What to watch today
- Tesla (TSLA) recalls a further 800,000 cars following a fault with certain vehicle models’ seatbelt reminder.
Markets in this article