View more on these topics

FTSE surges 3% after central banks reassure on rates


The FTSE 100 has joined European stockmarkets in rallying after the Bank of England and the European Central Bank offered reassurance over the likely path of interest rates.

Thursday’s session came to a close with the FTSE 100 ahead 3.08 per cent, or 191.8 points at 6,421.67, led by Royal Bank of Scotland, Wolseley, Standard Chartered, Rolls-Royce Holdings and GKN.

On the continent the Euro Stoxx 50 gained 2.88 per cent to 2,644.71, while the German Dax and the French Cac 40 both added more than 2 per cent.

The FTSE 100 started the day with gains but surged after the first Bank of England’s monetary policy meeting with Mark Carney as governor surprised the market.

Although no move was made on interest rates and quantitative easing, the Bank suggested it will not lift interest rates in the near future, saying “the implied rise in the expected future path of Bank rate was not warranted by the recent developments in the domestic economy”.

The European Central Bank also provided markets with a boost by issuing what looks like forward guidance on interest rates. ECB president Mario Draghi said the bank will keep interest rates at their historic low for “extended period” and suggested the current 0.5 per cent is not the lowest rates could go to.

This is the first time that the ECB has issued forward guidance on the expected path of interest rates, saying in the past that it never pre-commits on monetary policy.

Sterling and the euro both fell against the dollar after the two central banks made their announcements.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm