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:

  • Create a live or demo IG Trading Account or log in to your existing account
  • Enter <company name> or <ticket code> in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100, 1.2 on the Germany 30, and 0.4 on the US 500
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100, 1.2 on the Germany 30, and 0.4 on the US 500
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.