The Bank of England’s interest rate decision is expected at 12pm today. Last month it decided to reduce interest rates to 0.25% and restart its quantitative easing programme. This could prove to be good news for UK listed banks such as Lloyds Banking Group PLC (LON:LLOY), Barclays PLC (LON:BARC) and Royal Bank of Scotland Group plc (LON:RBS) because new loan demand may stabilise.
A further loosening of monetary policy in today’s interest rate decision by the Bank of England has been made less likely by UK retail sales figures. The figures released by the Office for National Statistics (ONS) showed a 0.2% fall in retail sales in July.
This was better than the minus 0.4% figure which was predicted but was behind the 1.9% gain made in July. The figure is good news for UK-focused consumer shares such as Vodafone Group plc (LON:VOD), ASOS plc (LON:ASC) and Boohoo.Com PLC (LON:BOO). Vodafone is flat today, while ASOS is down 1.8% and Boohoo is down 0.5% so far today.
Asia shares were relatively weak today. Concerns about monetary policy in Asia and the US is keeping investor sentiment pegged back, with fears emerging as to whether central banks have the capacity to stimulate a prolonged period of growth. This could be bad news for Asia-focused shares such as HSBC Holdings plc (LON:HSBA), Prudential plc (LON:PRU) and Reckitt Benckiser Group Plc (LON:RB).
Similarly, an uncertain outlook for the oil price held back global stock markets. This uncertainty was compounded by data which revealed that oil discoveries have fallen to their lowest level since 1952 as oil companies such as Royal Dutch Shell Plc (LON:RDSB) and BP plc (LON: BP) cut back on exploration expenditure.