FTSE 100 rises as Bank of England plays down rate hikes

Summarised from 2 outlets · Updated 14 Oct, 17:58 · Archive

The FTSE 100 closed up 0.7% after the Bank of England's chief economist expressed scepticism about multiple interest rate rises.

The FTSE 100 closed 0.7% higher on Wednesday at 10,724.86, with the FTSE 250 gaining 0.1% to 24,360.77, though the AIM all-share fell 0.4% to 767.91. The gains came despite strong US inflation data, as Bank of England chief economist Huw Pill, who has backed further monetary tightening this year, expressed doubt about market expectations for four interest rate increases of 25 basis points each.

"Is it obvious that we will need to follow market pricing to four 25 basis point hikes and so forth? There I would be a little bit more sceptical," Mr Pill said at an event in Bangkok. He added that to reach 100 basis points of rate rises, there would need to be concrete evidence of risks to wages and prices, with more evidence expected in the next six to nine months.

Separately, the Financial Times reported that Chancellor John Healey is expected to fund new spending and tax giveaways in October's Budget through higher taxes or spending cuts rather than additional borrowing. The fiscal package on 28 October would be 'scorecard positive' in 2029-30, the final year of the Parliament, meaning any extra discretionary spending would be fully funded.

How it is being reported

• FTSE 100 closes higher despite hot US inflationIn London, the FTSE 100 Index ended up 74.53 points, 0.7%, at 10,724.86.Evening Standard · 14 Oct, 17:34
• FTSE 100 closes higher despite hot US inflationIn London, the FTSE 100 Index ended up 74.53 points, 0.7%, at 10,724.86.Independent Business · 14 Oct, 17:34

In this story: FTSE 100 · Bank of England · Huw Pill · John Healey · Bangkok

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