European Bourses Close in Red Amid U.K Interest Rate Hike Speculation
European stocks opened the week largely lower as the Bank of England indicated hiking interest rates amid increasing inflation and as China reported less than expected Q3 gross domestic product growth of 4.9% compared with a year earlier.
The Stoxx Europe 600 was down 0.5%, Germany’s DAX fell 0.7%, the FTSE 100 in the UK closed down 0.4%, and the French CAC was down 0.8%. The Swiss Market Index ended flat with a positive bias.
Bank of England Governor Andrew Bailey said the central bank “will have to act” to offset rising inflation, which may include higher interest rates. Bailey added that he expects the increased inflation to be temporary.
The European Commission said Monday it will meet with UK officials this week in Brussels to discuss the European Union’s proposals aimed at easing Brexit’s impact on Northern Ireland. Commission Vice President Maros Sefcovic met with UK’s Lord David Frost on Friday to discuss the protocol on Ireland/Northern Ireland, which was proposed two days earlier.
European Central Bank Governing Council Member Klaas Knot forecasts interest rate increases in the first half of 2022 once central banks discontinue crucial stimulus programs, Bloomberg News reported. Knot does not expect the resumption of high interest rates, noting that a “high rate” in the future could be equivalent to 3% to 4%.
On the corporate front, THG jumped over 20% after Chief Executive Matthew Moulding confirmed his intention to relinquish his special share rights to enable the company to move its London Stock Exchange listing to the premium segment in 2022.
Moulding’s decision forms part of a strategy to restore the confidence of investors in the British e-commerce company and avoid a hostile takeover. # European Bourses Close in Red Amid U.K Interest Rate Hike Speculation
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