UPDATE: The FTSE 100 has taken a significant hit this morning as key market developments unfold. Rachel Reeves is set to face intense scrutiny from the Treasury Select Committee later today, while the Federal Reserve prepares to announce a critical interest rate cut by 7 PM UK time.
Reeves is scheduled to speak after 10 AM about the recent Budget leaks that have raised concerns over economic growth. Just yesterday, she responded to a direct inquiry from her counterpart, Mel Stride, regarding whether she authorized the leaks. Her answer? A firm “No.”
Meanwhile, the Federal Reserve is expected to cut interest rates by 25 basis points, driven by pressure from President Trump. Analysts from ABN AMRO Investment Management assert that Chair Jerome Powell is “almost compelled” to deliver this reduction, which is pivotal given the current economic climate.
This announcement comes just a week before the Bank of England is set to make its own interest rate decision, with Governor Andrew Bailey poised to influence the outcome. Bailey’s speech at an event this Thursday will be closely watched for signs of a dovish shift since the last meeting in November when rates were held steady.
The UK stock market is reacting negatively to these developments, with the FTSE 100 dropping further as British American Tobacco shares weigh heavily on the index. Investors are adopting a cautious stance ahead of the Fed’s announcement and in light of disappointing economic data from the UK.
As this situation develops, the impact on both the FTSE 100 and the broader market remains to be seen. Stay tuned for updates as we monitor Reeves’ testimony and the Fed’s critical rate decision this evening.
This is a developing story that holds significant implications for investors and the economy. The urgency is palpable, and we will continue to provide updates as more information becomes available.
