Surprise interest rate rise... in Turkey
We also have an unexpected interest rate hike today!
Istanbul’s central bank has raised its overnight lending rate by two percentage points in a surprise meeting, a day after turmoil swept the Turkish markets.
The. move lifts Turkey’s overnight rate to 46%, to support the lira a day after the arrest of the mayor of Istanbul, Ekrem İmamoğlu, a key challenger to president Recep Tayyip Erdoğan.
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Closing post
Time to recap.
The Bank of England has said UK businesses are freezing their hiring plans in response to Rachel Reeves’s tax increases and to mounting global uncertainty as it kept interest rates on hold at 4.5%.
Before the chancellor’s spring statement on Wednesday, the bank’s monetary policy committee (MPC) voted by eight to one to pause its cycle of rate cuts after three reductions in the past year.
Highlighting the risks from Donald Trump’s escalating trade wars and tax rises hitting the confidence of businesses and consumers, the committee said holding borrowing costs unchanged was warranted, even as the economy struggled for growth.
Andrew Bailey, the Bank’s governor, said:
“There’s a lot of economic uncertainty at the moment. We still think that interest rates are on a gradually declining path, but we’ve held them at 4.5% today.
“We’ll be looking very closely at how the global and domestic economies are evolving at our six-weekly rate-setting meetings. Whatever happens, it’s our job to make sure that inflation stays low and stable.”
Economists said the Bank had delivered a ‘hawkish’ hold, as eight of the nine policymakers voted to leave interest rates on hold. Only Swati Dhingra pushed for a quarter-point reduction to Bank rate.
The City money markets now indicate there is a roughly 50:50 split on whether the Bank cuts rates at its next meeting in May.
A rate cut is now not fully priced in until August.
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The cost of government debt payments in the world’s richest nations last year reached its highest level since 2007, outstripping the amount spent on defence, police services and housing, a report has found.
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The London Metal Exchange has been fined £9.2m by the City watchdog for mishandling the nickel market chaos in 2022, marking the regulator’s first penalty against a top investment exchange.
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