- FTSE 100 finishes down 59 points
- Barratt leads housebuilders lower after update
- UK GDP shrank 0.3% in August
4.40pm: FTSE closes in red
FTSE 100 closed lower midweek as new data showed a bigger than expected slip in GDP in August and the Bank of England confirmed there would be no further bond buying support from Friday.
The UK's top share index finished the day down 59 points, or 0.86%, at 6,826.
Sterling once again lost against the US dollar, standing at US$1.1079.
On Wall Street, benchmark indices were higher, albeit not much. The Dow Jones gained 0.40%. The S&P 500 added 0.18% and the Nasdaq was up 0.11%.
"Recession fears and the ongoing turmoil in the UK gilt market have hit indices in Europe, while in the US indices are holding their ground but not able to do much else," said Chris Beauchamp, the chief market analyst at online trading firm IG.
"This market remains on edge for further bad news, and there is plenty of opportunity over the next two days for either US CPI or bank earnings to give investors a nasty shock."
3.55pm: Footsie down but recovers from hitting worst level since March
Leading shares remain in the red heading into the close.
Amid poor UK growth figures, rising gilt yields, hawkish US inflation data and confusing statements from both the Bank of England and government, the FTSE 100 has fallen 62.11 points or 0.9% to 6823.12.
Earlier it hit a low of 6794, its worst level since March this year.
Housebuilders are under pressure following a disappointing update from Barratt Developments PLC (LSE:BDEV).
Its shares are down 8.11% while Persimmon PLC (LSE:PSN) is off 7.91%.
Banks are also falling on concerns about the effect of higher mortgage rates on consumer confidence, with Lloyds Banking Group PLC (LSE:LLOY) 6.15% lower and Barclays PLC (LSE:BARC) down 4.85%.
But the biggest loser in the leading index is JD Sports Fashion PLC (LSE:JD.), down 10.6% after its finance chief said he was leaving.
With the continuing strength of the dollar, overseas earners are in demand. AstraZeneca PLC (LSE:AZN) has added 1.42%, British American Tobacco PLC (LSE:BATS) is 1.42% better and Diageo PLC (LSE:DGE) has climbed 1.08%, also helped by a positive note from analysts at Bernstein.
As for gilt yields, the 20 year has climbed 8 basis points to 4.995% having earlier touched a 20 year high of 5.194%, while the 30 year is up 11 basis points at 4.903%.
3.08pm: Oil down as OPEC cuts forecasts
Oil prices have slipped back after OPEC cut its forecasts for demand.
In its latest monthly report, it forecast global demand for oil would grow by about 2.6mln barrels a day, down by 0.5mln barrels "to reflect the recent macroeconomic trends and oil demand developments in various regions."
It added: "These developments include the extension of China's zero-COVID-19 restrictions in some regions, economic challenges in OECD Europe, and inflationary pressures in other key economies, which have weighed on oil demand, especially in the second half of 2022."
In the OECD, oil demand growth is estimated at about 1.4mln barrels a day with the non-OECD at about 1.3mln barrels a day. For 2023, world oil demand growth is revised down to stand at about 2.3mln barrels a day.
Brent crude is currently down 1.3% at US$93.06 a barrel and West Texas Intermediate off 1.43% at US$88.07.
2.46pm: Wall Street edges higher ahead of Fed minutes
US stocks have edged higher as investors awaited the release of the minutes from the Fed’s latest meeting.
The Dow Jones Industrial Average is up 44.81 points or 0.15% at 29,284 in early trading, the S&P 500 has added 0.2% to 3598.35 and the Nasdaq Composite is up 0.29% at 10,456.03.
The increases are lower than initially hoped before the latest inflation data showed a higher than forecast rise in the producer price index.
Forex.com market analyst Fawad Razaqzada said the Fed’s minutes were expected to reiterate the central bank’s hawkish stance, but they were unlikely to move markets too much as several officials have since spoken.
“Attention turns to US data after even more hawkish commentary from the Fed overnight with Mester saying the central bank still had a lot of work to do to bring inflation down and that a more restrictive policy was needed,” he noted.
As earnings season ramps up, PepsiCo (NASDAQ:PEP) (PepsiCo (NASDAQ:PEP)) gained 3.1% after the food and beverage company upped its forecast for the year on the back of a 9% year-over-year 3Q revenue increase to $22 billion.
Hong Kong-based meme stock AMTD Digital shares had jumped about 10.5% at the open, after being halted for volatility, despite a lack of company news.
In the UK the FTSE 100 is off its worst but still down 56.95 points or 0.83% at 6828.28.
2.14pm: Public spending cuts - yes or no?
Yet more confusion, this time from the government.
At prime minister's questions, Liz Truss seemed to rule out public spending cuts.
????Liz Truss rules out public spending cuts - despite private warnings they’ll be huge.
Starmer: “During the leadership contest the PM said ‘I’m very clear. I’m not planning public spending reductions’. Are you going to stick to that?”
Truss: “Absolutely. Absolutely”.
— Pippa Crerar (@PippaCrerar) October 12, 2022
But, how then will the unfunded tax cuts unveiled in the mini-budget - and which helped cause the market turmoil - be paid for?
Maybe the prime minister's absolute answer was not so absolute.
Afterwards, PM’s official spokesman adds that “difficult decisions lie ahead” which sounds like a bit of a row back to me.
— Pippa Crerar (@PippaCrerar) October 12, 2022
In any case, with all the mixed messages here and rising inflation in the US, the leading index is now down sharply and close to its low for the day.
The FTSE 100 is down 71.88 points or 1.04% at 6813.35, while Wall Street is still ahead but off its best levels after the US data.
The Dow Jones Industrial Average is now showing a 0.12% rise, the S&P 500 is up 0.26% and the Nasdaq Composite is ahead by 0.39%.
Back with UK gilts and yields continue to climb.
The 20 year yield is now up 25 basis points at 5.16% having earlier hit a 20 year high of 5.194%, while the 10 year has added 18 basis points to 4.625%.
1.52pm: Significant move expected at next Bank meeting - Huw Pill
The Bank of England's chief economist Huw Pill said he remains committed to a "significant" move at its rate setting meeting on November 3.
In a speech in Glasgow, he said: "The MPC remains fully committed to delivering on its mandate – to maintain price stability – by fulfilling its remit – to return inflation to the 2% target. Despite difficult circumstances, that commitment is unwavering. Monetary policy really is an anchor in these challenging times...
"A couple of weeks ago I argued at a talk in London that the significant market reaction and economic implications of recent macro news – including recent fiscal policy news – was likely to prompt a significant monetary policy response at the MPC’s next meeting on 3 November.
"Of course, that rendezvous is still some time away. And, of course, much can happen in the intervening period, with markets exhibiting volatility and the geo-political and economic environment uncertain. Anyway I can only speak for myself today, not for the nine-member committee as a whole.
"But as things stand, I stand by my London statement. Given where we are, I continue to expect a significant monetary policy action at the MPC’s next scheduled meeting."
On the government's fiscal plans, he said."On my reading, these fiscal announcements will, on balance, provide a further stimulus to demand relative to supply over the medium-term, monetary policy relevant horizon. This will add to the inflationary pressure coming from the Energy Price Guarantee.
"And, the volatile market dynamics that followed the announcement of the Growth Plan underline the need to bolster the credibility of the wider institutional framework,"
He welcomed the news that "the role played by the Office for Budget Responsibility in scrutinising the Government’s fiscal plans will be resumed in the forthcoming budget statement. Its independent, external scrutiny of the outlook for the public finances will bolster the credibility of the process, thereby helping to add stability in what is a volatile environment at present."
1.45pm: US producer prices rise by more than forecast
A key measure of US inflation has come in higher than expected, suggesting that any hopes that the Federal Reserve would take a dovish stance on future rate rises could be disappointed.
The US producer price index rose 0.4% month on month in September, compared to estimates of a 0.2% gain.
The year on year figure came in at 8.5%, down on the previous 8.7% but above forecasts of 8.4%.
US PPI Final Demand (M/M) Sep: 0.4% (est 0.2%; prev -0.1%)
- US PPI Ex Food And Energy (M/M) Sep: 0.3% (est 0.3%; prev 0.4%)
- US PPI Final Demand (Y/Y) Sep: 8.5% (est 8.4%; prev 8.7%)
- US PPI Ex Food And Energy (Y/Y) Sep: 7.2% (est 7.3%; prev 7.3%)
— LiveSquawk (@LiveSquawk) October 12, 2022
12.31pm: JD sees another top executive change
JD Sports Fashion PLC (LSE:JD.) has fallen 6.7% after it announced its chief financial officer was stepping down next year.
Neil Greenhalgh joined the company in 2004 and has been in his present position since November 2018.
This is the second change in top jobs in recent months. In August the company appointed Régis Schultz as chief executive after Peter Cowgill stepped down from his role as executive chairman in May.
Greenhalgh said: "The decision to step back from JD during 2023 is one that I have been considering for some time. I fully intend to help [chairman Andy Higginson] and Régis settle into their roles and, by giving the board advanced notice, enable a smooth transition to a new CFO."
11.50am: US markets set for recovery
US stocks are expected to open higher, steadying after recent sharp falls as investors await the release of minutes from the Federal Open Market Committee’s (FOMC) last rate-setting meeting.
Futures for the Dow Jones Industrial Average were up 0.6% in pre-market trading, while those for the S&P 500 were 0.8% higher, and contracts for the Nasdaq-100 added 0.9%.
“Today, the minutes from the FOMC’s latest meeting will reveal if some Federal Reserve members are concerned about going ‘too fast’ in terms of rate hikes,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
She said she does not expect the minutes to reveal anything more dovish than a commitment to continue monitoring economic data. Any hint of doubt in the minutes about the effectiveness of the recent spate of interest rate hikes, however, may help bring out bargain hunters.
US rate-setters have delivered three 75-basis point interest rate increases in as many meetings but inflation remains stubbornly high at around levels not seen in 40 years. More interest rate hikes are predicted despite the likely harm to economic growth.
US producer price data for September is due later which will show whether pipeline price pressures are building up.
Meanwhile on Thursday, US consumer price data is expected to show a slight easing in the headline inflation figure.
While headline CPI figure is expected to have slowed from 8.3% to 8.1%, core inflation, which strips out more volatile items, may have spiked higher. This would be bad news for those hoping that US rate-setters may slow down the pace of interest rate hikes, said Ozkardeskaya.
“Investors, and the world, desperately want a soft US inflation data to convince the Fed to soften its tone. Otherwise, the markets will continue being battered, jobs being lost, and economy being squeezed,” she added.
Separately, news that the International Monetary Fund (IMF) on Tuesday lowered its global growth forecast for next year to 2.7%, from 2.9% underscores the gloomy outlook for global economic activity and is expected to weigh on investors’ minds.
Back in the UK and the FTSE 100 has dipped its toe in the red again, down 8 points at 6877.02.
11.35am: Some UK households may struggle to repay debt, says Bank
How timely for the Bank of England to issue its latest financial stability report now.
It said at the time of its policy meeting, interest rates were priced to peak at around 6% and this would some households in a similar position to the 2008 financial crisis.
It said: "Assuming rates follow this market-implied path, the share of households with high cost-of-living adjusted mortgage debt-servicing ratios would increase by end-2023 to around the peak levels reached ahead of the global financial crisis.".
But it said the risk of defaulting was lower than during the financial crisis.
The report says: "Rises in the cost of living and interest rates will increase pressure on UK household finances and make households more vulnerable to shocks. For businesses, higher costs, lower household demand and rising interest rates will reduce earnings. Some may find it harder to repay debts...
"People have less debt (relative to their incomes) and the share of high loan-to-value mortgages is much lower than before the global financial crisis. This reduces the risk of them defaulting on debt and banks are now required to be flexible in their response."
As for banks, it believes the sector is "substantially more resilient than before the global financial crisis, with significantly higher levels of capital and liquidity. They can continue to support households and businesses even if economic conditions get worse. "
Meanwhile, on the recent market turmoil, it says it continues to monitor the progress of liability-driven investment (LDI) funds in which many defined benefit pension schemes invest.
It said: "The Bank, The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) are closely monitoring the progress of LDI managers as they put their funds on a sustainable footing for whatever level of asset prices prevails when the Bank ceases purchasing gilts, and to ensure LDI funds are better prepared for future stresses given current market volatility. The Bank’s purchases will be unwound in a smooth and orderly fashion.
"While it might not be reasonable to expect market participants to insure against all extreme market outcomes, it is important that lessons are learned from this episode and appropriate levels of resilience ensured.
"Although the [Bank's Prudential Regulation Authority] regulates bank counterparties of LDI funds, the Bank does not directly regulate pension schemes, LDI managers, or LDI funds. Pension schemes and LDI managers are regulated by TPR and the FCA. LDI funds themselves are typically based outside the UK.
"The Bank will work with TPR and the FCA domestically to ensure strengthened standards are put in place."
10.58am: Bank updates on bond buying programme
The Bank of England has officially repeated that its emergency bond buying programme will end on Friday.
It even said it twice to get the point across.
"The Governor confirmed this position yesterday, and it has been made absolutely clear in contact with the banks at senior levels. Beyond 14 October, a number of facilities, including the new TECRF, are in place to ease liquidity pressures on LDIs."
— Bank of England Press Office (@BoE_PressOffice) October 12, 2022
Gilt yields are heading higher, with the 20 year up 13 basis points at 5.043%, the 10 year up 7 basis points at 4.51% and the 30 year up 14 points at 4.936%.
10.51am: Bank's interest rate decision had more effect on markets than mini-budget - Rees-Mogg
Business secretary Jacob Rees-Mogg has been saying on the broadcast round that the market turmoil was less caused by the mini-budget than by the Bank of England not raising interest rates by enough the day before.
He said: "I would point to the day before,when the monetary policy committee did not put up interest rates as much as the Federal Reserve had. And that was the more profound effect on markets."
This argument has not gone down too well, including with Rupert Harrison at Blackrock:
This kind of comment actively undermines the credibility of the government in the eyes of markets, who all know that it's total nonsense. Stark contrast with the Chancellor who has signalled that he gets it https://t.co/de7Pr7tvcu
— Rupert Harrison (@rbrharrison) October 12, 2022
And Samuel Tombs at Pantheon blamed the pound's fall directly on government policy:
Sterling should be trading at $1.30, given expectations that the BoE will raise Bank Rate to c.6% (further than the U.S. Fed). The current $0.20 shortfall from this level can be thought of as the cost inflicted on the economy by the government's reckless approach to fiscal policy pic.twitter.com/qOfJkmhRe0
— Samuel Tombs (@samueltombs) October 12, 2022
10.35am: Footsie turns the corner
Leading shares are finally heading in a firm direction, and it is a positive one.
The FTSE 100 is now up 29.82 points at 6915.05 after drifting for much of the morning so far.
AstraZeneca PLC (LSE:AZN) has added 2.31% while Diageo PLC (LSE:DGE) is up 1.35% at 3711p after analysts at Bernstein raised their target price from 3780p to 3950p with a market perform rating.
But Barratt Developments PLC (LSE:BDEV) continues to undermine the housebuilding sector following its latest update.
Its shares are down 4.29% while Persimmon PLC (LSE:PSN) is off 3.34%.
Banks are also under pressure on bad debt worries and concerns that higher mortgage rates will reduce housebuying activity.
Barclays PLC (LSE:BARC) has fallen 4.18% while Lloyds Banking Group PLC (LSE:LLOY) has lost 2.86% and NatWest Group PLC (LSE:NWG) is off 2.12%.
9.42am: Footsie continues to struggle for direction but holds firm
The leading index continues to struggle for direction but remains fairly calm despite the turmoil currently going on.
The FTSE 100 is down just 0.36 points at 6884.87 having at one point edged into positive territory, helped by its preponderance of overseas earner which benefit from any slip in sterling.
“Despite some harsh words from Bank of England governor Andrew Bailey towards the pensions industry last night, causing the pound to slump again, equity markets have not descended into chaos” says Russ Mould, investment director at AJ Bell.
“The FTSE 100 held firm at 6,884 as approximately three quarters of its constituents earn in foreign currencies, many in dollars, and they benefit from the translational effects of a weak pound...
“Sentiment towards banks is weak as the benefits to their earnings from higher interest rates might be offset by a growing number of bad debts, together with the potential for mortgage activity to reduce due to affordability issues.
“Legal & General and Phoenix Group have been weak for several days as investors wonder how they’re exposed to troubles in the pensions sector. And retailers have been weak because the market fears they’re going to see a big downturn in trading as consumers tighten their belts.”
Investors are also cautious ahead of some key US events, which could signal how hawkish the Federal Reserve is likely to be on future interest rate rises.
Craig Erlam at Oanda said: "It's clear this week that investors have one eye on the US, with Fed minutes this evening, US inflation data tomorrow and the start of earnings season likely to be the primary drivers into Friday's close.
"Any hope of a helping hand from the Fed minutes may not be forthcoming, with the commentary to an extent outdated at this point and policymakers seemingly unified in their goal of defeating inflation. Even a good CPI number tomorrow may do little to change that in the near-term."
9.30am: Pension funds need to review risks ahead of Bank deadline - regulator
UK pension funds should review their risks and funding gaps ahead of the end of the Bank of England's emergency bond-buying scheme on Friday, the Pensions Regulator has said.
Funds are trying to raise sufficient cash to meet hundreds of billions of pounds in collateral calls on derivative positions before the deadline.
The regulator also said funds should consider appointing professional trustees and to discuss whether employers can provide cash to cover any shortfalls.
It added: "As the Bank of England recently stated, insuring schemes against all extreme market outcomes might not be a reasonable expectation but it is important that lessons are learned from these recent events," the regulator said.
9.07am: Extending Bank's bond buying would "take pressure off government doing what's needed" - ex-Bank official
Market uncertainty continues amid news that UK GDP unexpectedly shrank in August, along with confusion over whether the Bank of England's bond buying programme will be extended beyond its supposed end on Friday.
Bank governor Andrew Bailey said in Washington last night it would, but since then the FT has reported officials suggesting it may go on longer if necessary.
Craig Erlam, senior market analyst at Oanda, said it should not be a surprise if the Bank did extend its bond buying beyond Friday.
He said: "While the hope within the central bank will be that its emergency measures have allowed pension funds to recalibrate and address the vulnerability in the bond market, if that doesn't prove to be the case it would be ridiculous to pull the rug from under it rather than extend the measures until the end of the month when we get the full budget.
"Still, at a time when investors are living in fear of what's around the corner, perhaps the mindset of "prepare for the worst and hope for the best" is behind it. It does go to show how huge the Chancellor's budget is in three weeks and the carnage that another misstep could cause. The BoE can buy the government time for now but it isn't a permanent solution."
Meanwhile Sir Charlie Bean, former deputy governor of the Bank, has suggested on Radio 4 that extending the bond buying programme may not be the best idea.
He said: "If you say you're going to keep on extending the facility, you take the pressure off the pension funds to do what's needed, you also take the pressure off the government to do what's needed and get the fiscal position in order.
"We shouldn't forget that this is the prime cause of [the market turmoil]."
Victoria Scholar, head of investment at interactive investor said the Bank's messaging was confusing but it is in a tricky situation.
She said: "The Bank of England’s messaging to the market over the last 24-hours has been conflicted and confused, causing unnecessary gyrations to the pound and adding to the sense of instability in the markets. This is not the first time that Bailey has had troubles guiding the market. He was labelled the ‘unreliable boyfriend’ last November for signalling lift-off on interest rates but keeping rates unchanged.
"The central bank is meant to laser focused on reining in inflation, with price levels close to double digits, sharply above its 2% target.
"However, its goal to maintain financial stability is currently overriding its monetary policy mandate, prompting emergency bond buying, which has helped to stem financial market contagion but is also an unintended form of stimulus. For now, the Bank of England has been forced to delay its shift towards quantitative tightening in conjunction with its rate hiking path as it attempts to restore order in government borrowing markets first and foremost."
Meanwhile long dated UK gilt yields are edging up again, with the 30 year rising 10 basis points to 4.897% and the 50 year up 5 basis points at 4.32%.
The 20 year is up ten basis points at 5.003%, the first time it has gone above 5% since the Bank intervened on 28 September.
8.17am: Barratt leads the fallers as Footsie falters
Leading shares are struggling for direction amid the confusion over the Bank of England's plans to end - or not - its bond market intervention, and as official figures showed an unexpected fall in UK GDP in August.
Jonathan Moyes, head of investment research at the Wealth Club, said: "It was hard to find many positives in the data, although the construction sector continues to be an area of strength. With a significant tightening of financial conditions through September and October, there is certainly a chill in the air. We expect this release to be a sign of the winter to come.
"The market’s attention will remain firmly fixed on both the Chancellor and the Bank of England as they look to restore confidence and stabilise the government bond market. With inflation remaining high, the bank is unlikely to see weak GDP as cause for softening policy. The government on the other hand is clearly looking to stave off a severe recession with loose fiscal policy. We look forward to the detail on how this will be funded on 31 October."
The FTSE 100 is down 4.66 points at 6880.57 in early trading.
Barratt Developments PLC (LSE:BDEV) is off 5.13% after the housebuilder's latest update, making it the biggest faller in early trading.
Richard Hunter, head of markets at interactive investor, said “Given that the country is gripped with wider economic uncertainty, inevitably some chinks in the armour have begun to appear for the housebuilders.
"Barratts has seen a sharp decline of 33% in net private reservations per week for the latest period, although on most metrics numbers remain above pre-pandemic levels. Forward sales have also declined by 13% in number and by 8.5% in value, although the general position is one of a strong order book which is 64% forward sold even at this early part of the new trading year...
"More broadly, the factors which have blighted the housebuilding sector from a share price perspective have recently moved to another level with the additional concerns surrounding the government’s general spending plans and the resultant effect on the UK bond markets. This has immediately fed through to increased mortgage rates which, coupled with reduced mortgage availability, has had an instant impact on customer activity..."
For Barratts, the negative reaction to the update in early exchanges adds to a share price decline of 46% over the last year, as compared to a drop of 3.4% for the wider FTSE100, with the housebuilding sector having largely been in the eye of the storm."
Other housebuilders are also down. Persimmon PLC (LSE:PSN) has lost 3.13%, Taylor Wimpey PLC (LSE:TW.) is down 2.67% and Berkeley Group Holdings PLC (LSE:BKG) has fallen 1.85%.
7.57am: Pound edges higher on hopes Bank will after all continue intervention
The Bank of England has managed to cause some confusion over when its intervention to stabilise the bond market will end.
The pound dropped sharply against the dollar last night, down to US$1.0924, after governor Andrew Bailey said in Washington the bond buying programme would end as planned on Friday.
But since the FT reported officials saying privately the Bank may extend the period after all, it has now recovered to sit 0.3488% higher at US$1.1004.
Meanwhile bond yields are lower at the moment, with the 30 year down two basis points at 4.776%. The ten year is down 3 basis points at 4.49%.
7.35am: One step closer to recession after UK GDP drops
The UK economy unexpectedly shrank in August, according to the latest official figures, raising renewed recession fears.
The country's GDP dropped by 0.3% compared to expectations of a flat figure, the first fall for two months. In July it grew by 0.1%, revised down from 0.2%.
In the three months to August the economy also fell by 0.3% compared with the three months to May, and forecasts of a 0.2% decline.
The Bank of England warned after its last rate setting meeting that the UK was in danger of falling into recession - two consecutive quarters of declining GDP - by the end of the year.
The monthly fall was driven by a decline in manufacturing and maintanance work in the oil and gas sector, said the Office for National Statistics.
GDP fell 0.3% in August 2022, following revised growth of 0.1% in July 2022 https://t.co/vUKZr3BVEy
GDP fell 0.3% across the 3-months to August. pic.twitter.com/LKYZ0LkXP8
— Office for National Statistics (ONS) (@ONS) October 12, 2022
ONS chief economist Grant Fitzner said: "The economy shrank in August with both production and services falling back, and with a small downward revision to July's growth, the economy contracted in the last three months as a whole."
Sophie Lund-Yates, lead equity analyst at at Hargreaves Lansdown, said: “The nation appears to have officially leapt from stagnation to contraction once again, in the latest instalment of the monthly GDP rollercoaster, with economic activity ebbing and flowing erratically for the last nine months.
"This latest data set unfortunately gels with the IMF’s recent warning that 2023 will feel like a recession for many people, and that the worst of the global growth slowdown is yet to come. Investors are waiting for signs that the recession has arrived, and while on traditional metrics, the UK isn’t there yet, today’s announcement takes us one heavy step closer to that reality."
7.00am: Blunt message from BOE governor sends pound lower
The FTSE 100 is set to open little changed this morning although the pound is under pressure following mixed messages from the Bank of England overnight as to whether it will extend its interventions in the bond market.
Spread betting companies are calling the lead index up by around 4 points.
Speaking in the US, Bank of England governor Andrew Bailey told a Washington conference that the intervention would end on Friday.
In a surprisingly blunt message, he said, "My message to the funds involved" is that "you've got three days left now. You've got to get this done."
But the FT reported that the Bank of England has signalled privately to lenders that it was prepared to extend its emergency bond-buying programme beyond Friday's deadline if market conditions demanded it, citing three sources.
5.10am vs 5.41am pic.twitter.com/K0xLhPL4ZB
— Sam Coates Sky (@SamCoatesSky) October 12, 2022
The pound fell sharply after Bailey’s comments, down to $1.1004 early Wednesday in London from $1.1097 late Tuesday.
Back in London results are due from Barratt Developments PLC (LSE:BDEV) and PageGroup PLC (LSE:PAGE).