By The FTSE 100 is in a holding pattern, lifting a little ahead of the crucial Bank of England announcement, after bursting up through the pandemic clouds on its recovery trajectory.
But seatbelts are still being fastened for a bout of volatility as the calmer moment for tech stocks is likely to be short lived given the jolt to the market Facebook owner Meta delivered with reported fall in profits.
The cost of living squeeze is looming large today, with the new energy price cap set to be announced, which will mean higher bills for millions of households.
With budgets already under so much pressure from the rise in cost of goods and services, trying to tether sky high inflation is highly likely to be the number1 priority of policy makers in the hot seat of decision making.
Although a rise in the official interest rate to 0.5% is expected, a fast move by the Bank of England to significantly tighten its mass bond buying programme which was aimed at lowering yields and reducing the cost of borrowing risks causing a fresh round of nervousness in financial markets.
Miners are powering ahead again on the blue chip index, off the back of higher commodity prices and expectation of continued demand for raw materials.
A slice of appetising results from Compass Group, showing quarterly revenue is almost back at pre-pandemic levels, pushing it to the top of the FTSE 100 leader board with shares rising 7% in early trade.
The skies appear brighter for travel stocks with British Airways owner International Consolidated Airlines Group and InterContinental Hotels group in the top ten risers in early trade as hopes increase that bookings are snapping back thanks to pent up demand.
Shell has reeled in bumper profits with oil and gas fields are churning out cash as prices of the commodities rise amid higher demand and shorter supply.
The big upswing in full year profit and the lifting of the dividend to 4% has been greeted with some cheer by shareholders, with shares initially rising 1.4% on the open, before falling back.
However, here will be plenty of stony faces around, given the results come just hours before families find out just how much their energy bills will rise by.
This is likely to add to the clamour for a temporary windfall levy on North Sea producers with the region considered to be one of the most profitable areas in the world for extraction after the government cut taxes to encourage production.
The fiscal changes brought in were designed to boost production in the UK continental shelf but with such a rapid recovery, and a surge in revenues expected, the tax break looks increasingly outdated.
The energy giants argue that the higher earnings will be ploughed back into investment into greener, cleaner forms of energy.
But that argument is harder to wash given this announcement of higher dividends and the $8.5 billion share buyback scheme, which will take place in the first half of 2022.
Comments