- The Bank of England held interest rates constant for the first time in nearly two years, which caused the pound to continue its decline to its lowest level since March.
- As traders reduced their wagers on additional rate hikes, shares of UK banks and home builders increased. After an unexpected decline in August inflation this week, the central bank decided to maintain its benchmark rate at 5.25%, capping a string of 14 consecutive increases since December 2021.
- In a written statement, Governor of the Bank of England Andrew Bailey stated that "inflation has fallen significantly in recent months and we think it will continue to do so." "That is good news. But complacency is not an option. We need to make sure that inflation gets back to normal, and we will keep making the choices required to achieve that goal.
- The Stoxx 600 Index for Europe fell by 1%, but it was still off its session lows. More falls on Wall Street were predicted by US futures. Brent futures are on their biggest losing streak in nearly a month as they fell for a third day. The yields on 10-year Treasury notes rose, and the dollar gained strength.
- The day after the Federal Reserve's meeting, Europe's central banks made their own chaotic flurry of choices. Before the BoE and Swiss National Bank shocked investors by keeping interest rates, the franc's value versus the euro fell the most since May.
- ECB’s Makhlouf: There's little chance of a rate cut before March.
- ECB's Kazaks: Given the current outlook, mid-2024 rate cut expectations are too early.
- BoE Bank Rate Actual 5.25% (Forecast 5.5%, Previous 5.25%) [Sterling Weakened]
- Traders erase bets on further BoE hikes, seeing peak at 5.44%.
