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Inflation has increased to 10.4pc, handing a blow to the Bank of England ahead of its decision on the next move for interest rates tomorrow.

Policymakers have faced calls from analysts to slow the pace of interest rate rises to ease the pressure on the global banking system.

5 things to start your day 

1) State pension age plan shelved as life expectancy falls | Plus: How the pandemic blew up Jeremy Hunt’s plan to raise the state pension age

2) Jeremy Hunt to press ahead with ‘Big Bang 2.0’ despite banking crisis | Chancellor’s plans to slash red tape could introduce more risk to fragile financial system

3) ‘Anti-competitive’ Brussels plot to shift City clearing houses slammed by investors | Proposals will undermine efficiency and increase costs in the City, investors claim

4) FTSE 100 companies now make more money in the US than the UK | Analysis fuels fears of an exodus of companies after a series of high-profile defections

5) Second-hand electric car prices fall as demand dwindles | Glut of stock hits the market as drivers trade their used cars in

What happened overnight 

Asian shares staged a cautious bounce on Wednesday with hopes a global banking crisis would be averted vying with uncertainty over the outlook for US interest rates.

Unease left both S&P 500 futures and Nasdaq futures barely changed. EUROSTOXX 50 futures edged up 0.2pc, while FTSE futures climbed 0.1pc.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.9pc, with Chinese blue chips up 0.3pc. Japan’s Nikkei firmed 1.6pc led by a rebound in beaten-down bank stocks.

Stocks rose in Australia and futures for benchmarks in Japan and Hong Kong advanced. Australian and New Zealand government bond yields rose, tracking the action in the Treasury market on Tuesday. 

Shares in US lenders rebounded as fears of a global banking crisis eased, lifting Wall Street’s main equity indexes ahead of the Federal Reserve’s highly-anticipated interest rate decision. 

The Dow Jones Industrial Average rose 316 points or 0.98pc to 32,560.60. The S&P 500 jumped 1.3pc to 4,002.87, while the tech-rich Nasdaq Composite climbed 1.58pc to 11,860.11.

Extreme volatility in short term government bonds dragged into the nine consecutive day, with traders betting on another 25 basis-point interest rate hike. The policy sensitive two-year Treasury yield surged as much as 21 basis points to 4.18pc.

On the other side of the Atlantic, the FTSE 100 index closed 1.79pc higher at 7,536.22, marking its best performance in over four months. The exporter-heavy index was boosted by a week pound, alongside a rally on bank stocks which surged 3.34pc across the FTSE 350.

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