FTSE 100 index mixed in early trading as BoE mulls negative interest rates
IG’s FTSE 100 pre-market estimates indicate that the benchmark is poised to open slightly lower on Thursday.
UK blue-chip equity barometer FTSE 100 index is mixed in overnight trading, IG data show.
IG's live FTSE 100 futures price estimates showed the index moving sideways along a median price level of 6040 as at 05:15 GMT on Thursday 21 May 2020.
This represents a slight dip from the previous day’s gains, when the Footsie had rallied as many as 120 points and nearly 2% to hit a high of 6075.7.
Gain access to FTSE 100 and thousands of financial markets via IG's world-leading trading and investments platform. With CFDs (read about CFDs here), you can buy long or sell short on the FTSE 100 index depending on whether you think prices will rise or fall. Start today by opening an IG account.
FTSE 100 closed up as BoE chair hints of negative interest rates
Despite some dips in the latter part of the day, the stock benchmark was able to close out Wednesday’s (20 May) session 0.40% higher.
The Footsie rose after Bank of England (BoE) chair Andrew Baily reportedly said the UK central bank has not precluded the possibility of negative interest rates.
He was quoted by The Financial Times as saying to the House of Commons Treasury select committee on Wednesday that he had ‘changed his position a bit’ on negative rates, adding that ‘of course we’re keeping the tools under active review in the current situation’.
For now, the BoE will ‘observe how the economy responds to the cuts that we have made’, Bailey stated in reference to the interest rate reduction made in March to a low of 0.1%.
If negative rates are realised, this would be the first time in the BoE’s 324-year history that interest rates have gone sub-zero.
‘Not obvious there will be an immediate bounce back’ for economy
His comments also followed UK chancellor Rishi Sunak’s warning on Tuesday 19 May that the economy is unlikely to follow a quick, ‘v-shaped’ recovery from Covid-19, with unemployment claims rising at a record rate to over two million.
‘We are likely to face a severe recession, the likes of which we haven’t seen, and, of course, that will have an impact on employment,’ Mr Sunak said, adding that ‘it’s not obvious there will be an immediate bounce back’.
How to trade UK stocks with IG
Are you bullish or bearish on the FTSE 100 and other individual UK equities? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs in a few easy steps:
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
