Shares bounce back as US cuts loans rate; In association with Chadwick Lawrence.
INVESTORS rocked by two days of market turmoil held their nerve today as London's FTSE 100 Index continued its bounce-back.
London's leading shares rose by almost 100 points, or 1.7%, as the market opened - building on the 160-point recovery yesterday after the US Federal Reserve's surprise interest rate cut to help avert a recession.
Asian markets were bolstered overnight by the 0.75% cut - the Fed's biggest in more than 25 years - with advances for Japan's Nikkei 225, the Australian Stock Exchange and Hong Kong's Hang Seng index.
Attention has now turned to whether the Bank of England will follow the Fed's lead and introduce an emergency interest rate cut. The Bank said it had no immediate plans to bring forward the next meeting of its Monetary Policy Committee, scheduled for February 6 and 7.
But all eyes will be on the publication today of the minutes of the committee's last meeting - when members voted to peg the rate at 5.5% - for clues to its future intentions.
Speaking to members of the Institute of Directors in Bristol, Bank of England governor Mervyn King warned last night that food and energy prices were likely to rise this year, possibly pushing inflation above 3%.
He said: "The next year will pose economic challenges for all of us - more so than at any time since the Bank of England was given its independence in 1997."
He added: "We face a difficult balancing act in the course of 2008. But we start the year from a position in which bank rate, at 5.5%, is probably bearing down on demand."
CLUES: Bank of England's Mervyn King
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|Publication:||Huddersfield Daily Examiner (Huddersfield, England)|
|Date:||Jan 23, 2008|
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