Rates to plunge to 2.75pc subsequent 12 months, says HSBC
Official figures have revealed a rise in retail sales in August, despite fears of waning consumer confidence.
5 things to start your day
1) Confidence slumps amid concerns Labour is talking Britain into recession | Families feeling less upbeat as ‘gloomy politicians’ reiterate warnings about the economy
2) South Yorkshire to host Britain’s first mini-nuclear reactor factory | Major boost for region as Holtec unveils preferred location for £1.5bn project
3) Thames Water seeks to delay billions in debt repayments in scramble to avoid nationalisation | The troubled utility giant is in last-ditch talks with lenders to extend its cash runway beyond next May
4) Amazon criticised by Business Secretary for ordering staff back to the office | Workers should be judged on output not time sat at their desk, says Jonathan Reynolds
5) Jim Ratcliffe forced to halt production of Ineos Grenadier | Billionaire’s car company suspends manufacturing amid ‘critical component shortage’
What happened overnight
Asian shares extended their rally on Friday, bathing in the afterglow of an outsized interest rate cut in the United States, while the yen edged higher as the Bank of Japan held rates steady and stayed upbeat on the economy
Japan’s Nikkei share average pared early gains amid a firmer yen on Friday, after the Bank of Japan kept its interest rates unchanged, as expected, and also upgraded its assessment on consumption.
The Nikkei share average rose 1.8pc to 37,834.09 early in the afternoon session, after entering the midday recess up 2.1pc.
The yen strengthened against the dollar to be about 0.3pc stronger at 142.16, as of 3.36 BST, after initially shrugging off the policy decision, which came when stock and bond markets were in the trading break.
Benchmark 10-year Japanese government bond futures declined 0.08 yen to 144.58 yen. Cash bonds had yet to trade following the BOJ announcement..
In China, the central bank kept its benchmark lending rates on hold, countering expectations for a move lower. Chinese shares were an outlier in the region, with blue chips down 0.3pc. The onshore yuan strengthened to the highest in nearly 16 months, leading to intervention by state banks to prevent it from appreciating too fast.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7pc to the highest in two months, tracking overnight gains on Wall Street. The index was headed for a weekly gain of 2.5pc.
Wall Street stocks soared to fresh records last night as markets cheered the Federal Reserve’s move to aggressively cut interest rates to protect the labour market.
The Dow Jones Industrial Average gained 1.3pc to 42,025.19, its first close above 42,000.
The S&P 500 also shot to an all-time high, surging 1.7pc to 5,713.64, while the tech-rich Nasdaq Composite index jumped 2.5pc to 18,013.98.
In the bond market, the yield on benchmark 10-year US Treasury notes rose to 3.72pc from 3.70pc late on Wednesday.
