Bank of England Edges Towards Negative Rates:
The Bank of England continued moving towards implementing negative rates last week in efforts to stimulate the economy. At the meeting of the Monetary Policy Committee, the bank held rates at their historic low of 0.1 per cent. It also left its bond purchase programmes unchanged. The Bank reported that economic conditions continue to recover. However, the bank’s current best estimate for economic growth is based on a comprehensive EU trade deal being agreed. With signs that no deal may be reached its outlook may already be overly optimistic.
The bank has briefed members of the committee on how negative rates could be implemented if the economic situation deteriorates. The announcement saw sterling lose more ground against the euro and dollar as a result. The bank’s official inflation target of 2 per cent remains an aspiration only. The latest figures show CPI fell from 1 per cent to 0.2 per cent in August.
Equities: Market snaps up new tech listings
Despite the profit taking which has seen US technology share falling since the start of the month, investor appetite remains for tech companies. Several new tech stocks have made successful stock market debuts this week. In the US, cloud computing company Snowflake completed the biggest ever IPO by a tech company as it raised $3.4bn and its share price jumped 160 per cent in its first day’s trading to give it a market cap of $63bn. JFrog, which helps firms manage their software updates, saw the value of its shares jump 47 per cent on its first trading day.
There was a successful tech IPO In the UK last week as online retailer and e-commerce provider The Hut Group began trading in London. Its success has been held up as a sign that the UK also has some world-leading tech companies. But while The Hut Group did well on debut it was muted compared with the US flotations, with its shares climbing 30 per cent on its launch. All these stocks have seen their prices settle slightly but all three remain comfortably above their launch price.