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FTSE 100 Steadies Ahead Of Bank Of England Decision

FTSE 100 Steadies Ahead Of Bank Of England Decision

June 22, 2021 16:16

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FTSE 100 is a big player in the world of stock exchange and hence the world economy because it is the yardstick which is used to measure the prosperity by the UK company law.

FTSE 100 has always managed to stay afloat despite the bad market after the Brexit 3 months back. Following the decision of Brexit, Bank of England has started devising policies that will help the economy of London to rise back and stay strong. One such decision is pending against the 2% inflation policy. This policy by the Bank of England came in August 2016. It is yet to be seen whether the policy will benefit the shares or not. In order to sustain the economic growth of the country, BoE decided to cut the bank rate by 0.25%.

This has come in lieu as the rates of Sterling went down since Brexit and this is to strengthen the economy before Britain formally leaves EU in the next two years. The Bank’s decision to cut down interest rate to 0.25% is something that has not happened since the past 322 years and England has always remain stringent with their interest rates.

FTSE 100 and other indexes were effected equally with this decision of BoE. But, the Bank of England looks at this decision as a way to strengthen economy and hopes that the stock tickers will go up in the coming months.

If the cut doesn’t help the market rates and the stock rates, then there would be further rate cuts in the coming month of November. Post the EU referendum, the market of London has been uncertain and it is further affecting the world economy.

Retail sales also need to be looked at. Even if they constitute only 20% of the Gross Domestic Index of the country, they do show the willingness of the people to shop in a post Brexit scenario. The retail sector is actually doing better as can be seen from the good performance of Morrisons in the stock market. The supermarket emerged at the top this week as it closed with its highest since March 2015. It went up 7.5 percent, which is a new high for this supermarket retailer.

Even if the value of Sterling went down after the Brexit fiasco, retailers will be benefited from Brexit because they bring in imported foods. Any company that brings goods from overseas will be on the better side of the entire policy. And this is what happened with Morrisons. However, how will the company make further benefits from this, that is yet to be seen.

The market wasn’t good for Marks and Spencer which went down by 2.6 percent. This came with the drop in the points of British clothing line NEXT, which fell by 5 percent.

The LED stock ticker for the FTSE 100 was higher compared to other indexes. It closed down at 6730.30 points which is 0.9 percent higher than the past two weeks of the stock rate of the index.

The uncertainty in the market values and the stock values of the company will be a common sight for the coming years. However, the ticker tapes of companies will be on and it will determine their values in the market.


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