FTSE 100 Live: Reeves to be grilled, interest rates nerves, Netflix swoop, Employment Rights Bill
Good morning and welcome back to the Morning Wire liveblog covering the FTSE 100 and other big market moves.
Rachel Reeves is set to be grilled by MPs at the Treasury Select Committee later this week on the Budget while economists will begin looking ahead to the final interest rates decisions of the year to be made by the Bank of England and Federal Reserve next week.
The Bank of England’s expected decision to cut interest rates by 25 basis points could be a “closer call” than markets predict, analysts have suggested.
Markets have all but priced in interest rates falling to 3.75 per cent at the Bank’s next decision on 18 December after a flurry of data points pointed to a continued decline in inflation levels.
But economists at Oxford Economics have warned that the Monetary Policy Committee (MPC)’s decision could be tighter than analysts assume given splits in opinions among policymakers.
Economists Andrew Goodwin and Edward Allenby suggested that there will be a “closer call” given recent surveys have pointed to higher inflation expectations trends than some hawkish members on the MPC might feel comfortable with.
Several Bank members are set to speak in public this week, including MPC members Clare Lombardelli, Clare Lombardelli and Swati Dhingra, who will appear before the Treasury Select Committee tomorrow.
Their appearance before MPs will come a day before Reeves is set to be grilled by the same group of parliamentarians on her Budget, which she said was aimed at lowering the cost of living.
The FTSE 100 had a difficult week, dropping slightly over five days. Some listed companies have begun to sound their warnings on some of the most damaging aspects of the Budget for the private sector, with gambling-based companies suggesting they may be hit hard.
She may face questions on the extra tax burdens falling on both businesses and households.
The Chancellor is also set to face questions over her fallout with the Office for Budget Responsibility (OBR) in an ordeal since dubbed ‘The Leaky War‘.
UK-based firms will be heading into Christmas looking over the package of tax rises to understand how they can avoid being hit too hard.
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