Welcome back to the City AM FTSE 100 liveblog. Good morning and welcome to our latest coverage of the financial markets.
Market Outlook: FTSE 100 Braces for Decline Amid Gold Rout
The FTSE 100 is set to open lower this morning as a deepening rout in gold prices adds pressure to the market. Investors are turning their attention to a pivotal event later this week, though expectations suggest little surprise is in store.
Bank of England's Monetary Policy Meeting in Focus
On Thursday, the Bank of England's monetary policy committee will convene for its first meeting of the year, deciding whether to adjust interest rates. This follows the Christmas cut that reduced rates to 3.75 per cent, marking the fourth reduction of the previous year.
Bank governor Andrew Bailey previously indicated that inflation had "passed the recent peak", setting the stage for further cuts. However, he cautioned that future decisions would likely be "a closer call", hinting at a more cautious approach ahead.
Inflation Data Adds Complexity to Rate Decision
Recent figures from the Office for National Statistics (ONS) have complicated the picture. In January, data showed that the consumer price index inflation edged up to 3.4 per cent in December, slightly exceeding economists' forecasts of 3.3 per cent, as polled by Bloomberg.
The ONS attributed this rise to higher tobacco prices and recently introduced excise duty increases, marking the first increase in inflation in five months. More concerningly, food price inflation climbed to 4.5 per cent, up from 4.2 per cent the previous month.
This measure is closely monitored by Bank of England rate-setters, as grocery costs can significantly influence inflation expectations among consumers and businesses alike.
Economists Predict a Hold, But Uncertainty Lingers
Across the City, economists are largely predicting that the Bank will hold interest rates steady this week. Yet, there remains a question of whether policymakers might deliver an unexpected move to kick off the new year, adding an element of suspense to the proceedings.
We will bring you the latest news and analysis throughout the morning, along with insights into what lies ahead for the week in finance.
Weekend Highlights: Key Stories from the Financial World
In the meantime, here are some of our top stories from the weekend:
- Drinks firms 'have no choice' but to increase prices amid rising costs.
- Bank of England set to hold interest rates as policymakers battle against sticky inflation pressures.
- Starmer looks to woo Japanese investors during an Asia trip, aiming to boost the UK economy despite some backlash.
- Top UK taxpayers revealed in new annual analysis, including figures like the Betfred brothers, Alex Gerko, and Mike Ashley.
- Schroders signs a deal with a leading Chinese battery maker to support European green energy storage initiatives.
- Business confidence drops, presenting a challenge for the Labour government.
The liveblog has now ended. No further updates are available at this time.
