- Summary:
- FTSE 100 started the session lower after the Bank of England holds rates unchanged in a unanimous decision as was expected by markets. The Bank of England
FTSE 100 started the session lower after the Bank of England holds rates unchanged in a unanimous decision as was expected by markets. The Bank of England kept rates at record low levels of 0.1% and left the asset purchases unchanged. Andrew Haldane voted against an increase of purchase UK government bonds by an additional 100 billion.
The bank expects the United Kingdom economy to contract by 9.5% in 2020 before growing by 9% in 20221. BoE warned that the unemployment rate would remain high around 7.5% in 2020. The inflation expected to be subdued and will reach 2% in two years.
Regarding negative interest rates, the central bank noted that negative rates could weaken the UK financial sector even further, thus destabilizing the fragile UK economy even more.
Glencore is the worst performer in the FTSE as it gives up 4.27% at 187.98. Lloyds is 1.10% lower at 27.86, NatWest is 1.47% lower 110.28. Vodafone is 1.13% lower at 115.86, while Barclays is 1.77% lower at 105.47.
FTSE 100 Daily Analysis
FTSE 100 is 0.69% lower at 6,061 as the index continues the consolidation phase between the 50 and the 100-day moving average. The Bank Of England failed to deliver the catalyst for the next move. Traders should wait for a break of the recent trading range.
If the index breaks below the 100- day moving average at 5,987 sellers could open a short position targeting 5,860 the low from August 3. Next support waits at 5,661 the low from May 14.
On the contrary, if the index closes today above the intraday high at 6,104 might challenge the 50-day moving average at 6,190, which would attract more bulls to join the action. Next resistance stands at 6,318 the top from July 21.
FTSE 100 Daily Chart
