The FTSE 100 received a boost after new Bank governor Mark Carney followed in the footsteps of his predecessor and kept UK rates at historic lows, also maintaining the current bond-buying scheme.
This was Mr Carney’s first Bank meeting, where some economists were expecting him to discuss the possibility of increasing interest rates, with the UK economy showing signs of improvement. However the MPC’s statement instead suggested a continuation of the record low base rate for a longer time than predicted by analysts, and traders bought equities on the back of this. While UK rates remain at all-time low we may see a stronger equity market, as cheaper borrowing costs help the stock market.
European equities are also in positive territory after the cost of borrowing for Portugal dropped today, bringing a degree of stability to the eurozone. Investors also welcomed the decision by the European Central Bank to keep eurozone rates at 0.5%.
The New York Stock Exchange is closed for Independence Day, but US index futures are still open, with Dow futures up 102 points at 15,090.