FTSE 100 declines as BoE raises rates and inflation declines more slowly than anticipated
FTSE 100 falls into the red as Bank of England hikes rates
Bank fails to rule further hikes, inflation to fall slower than projected
No new information on new markets disappoints as Rolls-Royce declines.
The FTSE 100 index fell back after the Bank of England’s interest rate decision after the Bank of England advised against tightening monetary policy.
The main index has now fallen 30 points to 7,711.32. However, the pound fell and is now down 0.1% against the US dollar after falling 0.4% ahead of the announcement.
The FTSE 100 is lower after today’s Bank of England rate decision, mainly due to increased expectations that the bank will raise rates.
George, the chief economist at Mazars, says the bank has no choice but to keep raising interest rates to prevent inflation from taking root. “The rise was hardly news,” he says/ “Britain has the fastest wage growth in developed markets and one of the tightest labour markets. That means inflation is taking root.
The Bank of England has no choice but to tighten the money supply to the curb consumer demand. “Homeowners who have been eagerly waiting for their refinance rates to drop may be disappointed.
Unless we see a financial meltdown that could affect the banking sector or some other systemic event, we expect the central bank to continue to tighten interest rates despite slowing economic growth.
FTSE 100 TECHNICAL ANALYSIS DAILY CHART:
FTSE 100 is currently trading in down channel.
FTSE 100 is currently trading below all SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting down trend.
Immediate resistance is at 7727.55 & its immediate support level is 7692.67
HOW TO TRADE FTSE 100 IN THIS WEEK
The FTSE 100 traded up until its trend declined and began to fall. Currently, the price is trading in an important support zone, if this is broken, we can expect further declines in the FTSE 100.
