The Bank of England increased interest rates for the first time in a decade in an effort to ward off inflation pressures. Its Monetary Policy Committee voted seven to two in favour of raising the bank rate by 0.25 percentage points to 0.5%. Two further hikes are expected over the next two years, as the Bank aims to control prices. The news rattled investors initially, with sterling falling 1% and 1.3% against the dollar and euro respectively, but the FTSE 100 was up 0.7% for the week to close on Thursday. The rate hike is good news for savers, but less positive for almost four million UK households which face higher mortgage interest payments after the rise.
New head of the Fed
US President Donald Trump has named Jerome Powell as his nominee to replace Janet Yellen as head of the Federal Reserve when her term ends in February. Powell, a Republican former lawyer and private equity executive, has served as a member of the US central bank’s board since 2012. Powell is expected to continue the Fed’s policy of gradually raising interest rates and is widely regarded as a source of continuity. The 10-year Treasury yield dipped from Wednesday’s peak of 2.39% to 2.34% by the end of trading on Thursday.
Profit boom for oil companiesOil companies have delivered strong quarterly results. On Thursday, Royal Dutch Shell announced a better-than-expected 47% increase in third-quarter profits. The Anglo-Dutch group earned $4.1 billion during the quarter compared to $2.8 billion in the same period last year. This followed strong results from BP earlier in the week, who reported a doubling in third quarter profits from $933 million last year to $1.87 billion. BP has now managed to pay off most of its liabilities related to the 2010 Deepwater Horizon explosion and the resultant oil spill in the Gulf of Mexico. BP’s Chief Financial Officer, Brian Gilvary, said the outlook was positive. “We’re in a much stronger position now to manage wherever the price decides to go next, because we’ve done the heavy lifting of getting the cash back down,” he said. Overall, profits have been boosted for the firms in the industry due to an increase in demand for oil, stronger refining and chemical industry conditions and higher production from new fields. Recent comments from Saudi Arabia that it would back the extension of output cuts by major producers have helped support oil prices, with the price of Brent crude rising above $60 a barrel for the first time since 2015.
As the nights draw in, and thoughts turn towards the holiday season and traditional festive fayre, anyone with a penchant for peanuts or a weakness for walnuts may be thinking about shelling out for a set of nutcrackers. Such implements are chestnut good enough for one achene aficionado from China’s Guangdong province, however. Li Weijun, a kung fu master, cracked a Guinness World Record this week, by using his bare hands to crush 302 walnuts in 55 seconds. He really had them whipped.