Bailey sends markets into a panic

Investors got spooked by comments from BoE Governor Andrew Bailey, which said yesterday that there was not much the central bank could do to stop the looming recession. The FTSE 100 was down by 0.86%.

The index was also hampered by energy stocks, which struggled as oil prices fell on recession fears.

Today, metal prices rose after several producers threatened to disrupt supply, which lifted mining stocks. The FTSE 100 was up 0.3% at 9am.  

Investors are awaiting a rate decision by the European Central Bank due around 1:15pm. It is expected to make a strong move in an attempt to regain control of inflation. The forecast is for a three-quarter point increase in the main refinancing rate, from 0.50 to 1.25%, which would be an unprecedented move. To be precise, forecasts are between 0.50 and 0.75 points higher, with a slight bias towards 0.75.

Among stocks, Associated British Foods fell 8% after it unveiled a lower profit outlook for next year due to inflation.

 

Things to read today:

Europe beats US on Chinese listings for first time (Financial Times)

New Gas Terminals Arrive to Ease Putin’s Grip on Europe (Bloomberg)

Elon Musk Allowed to Amend Twitter Countersuit to Add Whistleblower Claims (WSJ)