The Bank of England warned of more interest rate rises this morning in an effort to cage UK inflation, currently at +3.1%. There was a unanimous vote by the Monetary Policy Committee (MPC) to keep rates at current levels, though up to two rate hikes in 2018 look more than possible.
Assuming +0.25% gradations would mean rates would climb to 1% by the finish of 2018. “The MPC judges that inflation is likely to be close to its peak, and will decline towards the 2% target in the medium term,” the BoE said. The MPC’s next meeting arrives in February. The mood music seems generally subdued – little boat rocking for the moment.
At 4pm sterling was trading +0.03% higher at 1.3422 while the euro was -0.41% lower against the dollar at 112.62. The UK prime minister Theresa May is in Brussels in the hope of getting EU leaders to approve next-stage trade talks – plus that icky matter of an EU divorce bill – with confirmation by tomorrow of definitive progress, possibly.
Earlier today European Central Bank boss Mario Draghi confirmed the ECB has upped inflation and growth forecasts but stopped short of giving a firm exit date to quantitative easing – even saying it was ready to accelerate it should conditions demand.
- UK FTSE 100 7,448.12 -0.65%
- DAX 13,138.11 +0.09%
- CAC 40 5,384.82 -0.27%
- Dow 24,625.46 +0.16%
- S&P 500 2,667.06 +0.16%
- Nasdaq 6,896.08 +0.30%
- Nikkei 225 22,694.45 -0.28%
- Gold 1,253.60 +0.40%
- Oil WTI 56.66 +0.09%
Disney buys 21st Century Fox entertainment biz in $66bn deal
It’s official: Walt Disney is to buy 21st Century Fox’s entertainment arm for more than $66bn though the deal will need an official sign-off from regulators. Disney inherits almost $14bn of Fox debt. After all the ifs and buts, Disney looks set to be the world’s biggest media company.
“This combination, under Bob Iger’s leadership [Bob Iger, Disney’s chief exec], will be one of the greatest companies in the world,” said Rupert Murdoch. “I’m grateful and encouraged that Bob has agreed to stay on, and is committed to succeeding with a combined team that is second to none.”
It means a newly cut-down-to-size Fox will re-focus its business on news and sport – something of a return to its news roots. But there remains massive pressure on Iger who has to assimilate Fox into a disparate pool of other operations including Marvel, LucasFilm and Pixar. But he has scale and distribution muscle on his side.
Thomas Cook closes in on Niki
The BBC reported earlier that Thomas Cook may be looking to snap up Air Berlin’s Niki carrier (Austria-based) after Lufthansa pulled out following EU competition concerns.
“We plan to increase our capacity in the German market in light of the increased demand," the BBC quoted a Thomas Cook spokesman. "We are considering our options, including a takeover of Niki, or buying parts of the airline."
Breaking news: FTSE 100 closes at 7,448, down 49 points. Standard Life Aberdeen was the biggest Big Board loser, down more than -3%. Convatec and CRH also saw chunky falls though Mondi surged more than +3%. Land Securities Group was up more than +3.1% while BT was up +2.5%.