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Sunday, April 2, 2023

FTSE 100 Live 13 April: UK inflation above expectations at 7%, Bank of England interest rates pressure

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Building safety pledge reaches £2bn

More than £2 billion has so far been committed by over 35 developers to fund building safety repairs, Levelling Up Secretary Michael Gove said today.

Several listed housebuilders have revealed in recent days they have signed a pledge to fix all unsafe tall buildings they have had a role in developing.

The industry is also paying a further £3 billion as part of an extension to the Building Safety Levy, which will be put towards protecting leaseholders.

Gove said: “Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause.

“I welcome the move by many of the largest developers to do the right thing. But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

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Big rates hike for New Zealand, gold price higher

New Zealand’s central bank today surprised markets by hiking interest rates by half a percentage point, its fourth successive increase.

The 0.5% rise in the Reserve Bank of New Zealand’s official cash rate to 1.5% comes amid expectations for the country’s inflation rate to hit 7% in the first half of this year.

Policymakers called the move — their biggest in two decades — as the “path of least regret” as they look to get ahead of the inflation curve.

The sentiment is likely to be shared by other central banks in the coming weeks, with the US Federal Reserve poised to announce a half point rise next month.

US inflation came in at 8.5% yesterday, but Wall Street was boosted by hopes that price pressures may have peaked following a weaker-than-expected core inflation figure.

Futures trading is pointing to a positive start for the S&P 500 index later, with results from JPMorgan set to be one of main events at the start of the Q1 earnings season.

Asia markets were in positive territory this morning, even though figures showed China imports unexpectedly declined in March. The FTSE 100 index is set to open six points lower at 7570, according to CMC Markets.

Oil prices, meanwhile, continue to climb as the economic impact of China’s ongoing Covid-19 restrictions are offset by more signs of supply tightness caused by the Ukraine war and Russia sanctions.

Brent crude stood at $105 a barrel, having dipped below $100 earlier this week. Gold, which is seen as a hedge against inflation, traded at its highest level in a month at $1970 an ounce.

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