London’s FTSE 100 ended the week in positive territory. And this is after two weeks of losses despite edging lower, as banks retreated a day after the Bank of England raised interest rates to curb soaring inflation.
The FTSE 100 index closed 0.2% lower by reversing earlier gains. By leaving it 0.6% higher over the week. The mid-cap index declined 1.2%. But still recorded its first weekly gain after a four-week losing streak, advancing 0.5%. Energy stocks outperformed by rising 3.8% to their highest level in nearly two years. This is as the oil prices extended gains on U.S. supply concerns amid frigid U.S. weather and ongoing political turmoil.
Base metal miners ended the day flat, while banks dropped 1.2%. Keith Temperton, a sales trader at Forte Securities said that if they have got a rising interest rate into an economy that is weakening, consumer sentiment crashing, and many other factors that domestic UK banks are facing right now. This can push traders to sell off a little bit. The Bank of England raised interest rates to 0.5%. Nearly half of its policymakers wanted a bigger increase to contain rampant price pressures. This is as the central bank warned inflation will soon top 7%.
Two-year yields on British bonds rose to their highest. This is while the five-year yields touched a level last seen in October 2018. Shares in SSP rose 0.7%. As the Upper Crust owner said that its sales were recovering after a slowdown when fewer people travelled due to Omicron-led curbs, hitting its stores at train stations and airports.